Intel details new technology for cheaper chips
SANTA CLARA, Calif., Aug 13 (Reuters) - Intel Corp.
(INTC.O) on Tuesday unveiled details of plans that will allow the world's largest semiconductor company to make the next leap in building microchips that are smaller, faster, cheaper and more energy-efficient.
Intel said it plans to move to large-volume manufacturing of microprocessors based on so-called 90-nanometer circuitry technology by the second half of 2003, compared with 130 nanometers currently. A nanometer is one-billionth of a meter.
This move promises to thrust Intel into the lead in the high volume manufacturing of the world's smallest computer chips, which contain billions of circuits each of which are one thousand times thinner than a human hair.
Intel's switch to the tinier circuits comes despite a sharp decline in demand for new computer chips amid a slowdown in electronics demand and a resulting decline in spending on new chip production equipment by many of its global competitors.
At the same time, all chipmakers march along this road of driving the dimensions of microchips ever smaller with each successive generation. However, Intel is moving faster than many others in moving to the next technology, and is sticking to its strategy of making its own chips in the roughly dozen chipmaking plants it has around the globe.
By contrast, Advanced Micro Devices Inc. (AMD.N), Intel's biggest rival, has taken a more conservative route and is teaming up with contract manufacturing partner United Microelectronics Corp. (2303.TW) of Taiwan to compete with Intel on 90-nanometer scale chips, analysts said.
BET ON INVESTMENT
The company's push into 90-nanometer technology marks a bet by Intel that demand for powerful new circuits will recover within two years, rewarding it for continuing to invest aggressively in new technology during the recent slump.
Intel shares fell 83 cents, or 4.7 percent, to $16.70 in Nasdaq trading.
The Santa Clara, California-based chip maker's current leading edge technology for making microprocessors is based on 130-nanometer technology.
The company says its new process can create transistors whose key features are just 50 nanometers apart, or 2,000 times narrower than a human hair.
The news has long been expected, but investment bank SG Cowen said in a research note to clients that it was the first time Intel had confirmed details of the type of technology it will use.
Chip miniaturization reflects Moore's Law, the 1965 observation of Intel co-founder Gordon Moore, which has correctly predicted that the numbers of transistors on a chip, or computing power, will double every eighteen months.
"By next year, we will be the first company to have a 90-nanometer process in volume manufacturing," said Mark Bohr, Intel's director of process architecture and integration.
"This new process combines higher-performance, lower-power transistors, strained silicon, high-speed copper interconnects and a new low-k dielectric material," Intel said in a statement, citing the mix of advanced technologies it plans to use.
"This is the first time all of these technologies will be integrated into a single manufacturing process."
(Additional reporting by Caroline Humer and Eric Auchard in New York)
08/13/02 16:44 ET
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