During briefings with analysts and the press on Friday, Intel officials hinted that the company was in the early stages of planning a new 300-mm fab, called "D1D", in Hillsboro. What is expected to be a next-generation 300-mm development fab will most likely cost between $1.5-to-$2 billion when it is fully equipped.

Intel officials dropped only hints about the D1D fab and would not give out details about the timing or potential capacity of the facility. Initial site work for D1D is expected to start this month.

The company is already processing 300-mm (12-inch) diameter wafers in its D1C development fab here, using a 0.13-micron copper technology, and Intel has equipped a new research facility adjacent to D1C to prepare new process modules for production plants at other sites (see May 11 story).

The D1D plant represents Intel's sixth 300-mm facility. Intel--the world's largest chip manufacturer--now operates two 300-mm fabs in Hillsboro: the D1C development fab and the new "RP1" research facility. It is also planning dedicated 300-mm production fabs in New Mexico, Ireland, and Arizona. A significant portion of Intel's record $7.5 billion capital spending budget in 2001 is targeted at 300-mm and new copper-chip processing technologies.

With its R&D and investment strategies in place, Intel is claiming it has regained the leadership position--if not bragging rights--in the 300-mm fab race. But more importantly, Intel officials asserted that the 300-mm fab strategy will eventually give the company a huge cost advantage over competitors, particularly microprocessor rival Advanced Micro Devices Inc.

Currently, Intel is not planning to bring its 300-mm fabs into production until 2002. The D1C development fab will provide "partial production" by early next year using Intel's 0.13-micron process technology. That process is expected to be transferred to the company's first dedicated 300-mm production fab in Rio Rancho, N.M., sometime during 2002.

Intel plans to hit the ground running once its 300-mm fabs are up and running next year, according to Sunlin Chou, senior vice president and general manager of the company's Technology and Manufacturing Group. "We fully expect our yields in our 300-mm fabs to match those with our existing 200-mm fabs," Chou said during a question-and-answer session with the press and analysts on Friday. The yield will enable Intel to drive down costs compared to existing 200-mm fabs, he added.

During Friday's briefings, Intel officials also gave journalists and analysts a tour of the company's new 300-mm research center, called RP1. The $250 million facility will be dedicated strictly to 300-mm research and "pathfinding"--meaning it will focused on the key "cross-over" phase between research & development to speed the use of new technologies (see May 11 story).

"All future logic technology development at Intel will be done on 300-mm wafers," said Tom Garrett, 300-mm program manager at Intel. (By "logic" chips, Garrett was referring to the company's flagship processor lines and other products.)

Intel is pressing hard to get its 300-mm fabs into production--and for good reason. At present, the company is making its flagship central processors and other chip products in 200-mm frontend lines, using 0.18-micron process technologies.

But at the 0.18-micron technology node, Intel's die sizes and costs are too high for some key products, especially the Pentium 4 processor, according to analysts. To cut costs and die sizes, Intel is currently moving 0.13-micron process technologies into its its 8-inch (200-mm) fabs.

By July of 2001, in fact, Intel is expected to roll out a 0.13-micron version of its Pentium III processor, code named "Tualatin." And later this year, it will unveil a 0.13-micron version of the Pentium 4, dubbed "Northwood."

Starting in early 2002, Intel aims to begin ramping up production of its processor products on 300-mm wafers and 0.13-micron processes in the D1C fab in Hillsboro. As the company fans out this process and larger wafer diameter technology, it will expect to see dramatic cost savings, said analyst Nathan Brookwood, principal of InSight 64 Research in Saratoga, Calif.

"Intel says that a die produced on a 300-mm wafer is 30% less than a die produced on a 200-mm wafer," Brookwood said. "If that's true, then Intel may be in a better position in respect to AMD."

Meanwhile, AMD is far behind Intel in terms of 300-mm technology, according to industry analysts.

Sunnyvale, Calif.-based AMD has announced plans to build a 300-mm fab in the future, but the timing and details of the plant remain unclear. Many observers believe AMD will end up sharing the cost of its first 300-mm fab with a partner, and Motorola Inc. has been rumored to be the most likely candidate for a joint venture.

When Intel moves 300-mm wafers into production, the company will be able to lower the costs for several chips, especially its "value-line" processors for low-end PCs, Brookwood said.

At Friday's briefings, Intel outlined a 300-mm production fab roadmap. The D1C facility in Hillsboro is expected to be in "partial" production during early 2002, using Intel's 0.13-micron process technology. That process, internally called P1260 by Intel, is a 1.3-volt technology, capable of supporting six layers of copper metal interconnect.

On Friday, Intel officials said the D1C fab in Hillsboro will start up a next-generation 0.10-micron (100-nm) technology during the second half of 2002. This process, called P1262, is also a copper-based technology, capable of supporting six layers of metal interconnect.

In 2002, Intel plans to transfer the 0.13-micron process to its first dedicated 300-mm production facility, called Fab 11x ("x" expansion) in Rio Rancho, N.M. Intel announced the 300-mm facility a year ago, setting the plant's budget at $2 billion (see March 24, 2000, story).

Intel also has at least two other 300-mm plants on the drawing board--Fab 24 in Leixlip, Ireland, and another new plant in Chandler, Ariz. The Arizona fab is expected to move into production this summer a 200-mm plant, but it has been set up for 300-mm substrates in the near future. Two months ago, Intel pushed back the start of Fab 24 in Ireland to the second half of 2003, partly because of poor market conditions (see March 14 story).

And now, Intel is in the planning stages for the new D1D wafer fab. "We are doing a lot of the design work on the new 300-mm fab right now," Garrett said.

Garrett declined to comment on the details of D1D, but noted the company this month will break ground on an office building that will house the administration staff for the new plant.