Intel breaks ground on 450mm Fab -

Intel has started building its first dedicated facility for 450mm wafer production.

The new foundry, which will have the catchy title D1X Module 2, will come online in 2015 and cost $2 billion.

The 450mm facility will set records because of the cost of the new manufacturing equipment, something that Intel is banking on. After all - if it is one of the few chip makers that can afford the new generation of gear, it will will gain a significant competitive advantage.

Intel's enthusiasm may be masking some nerves. The industry attempted a transition from 200mm to 300mm transition which went disastrously wrong.

The cost and fears of another disaster mean that rivals like IBM, Samsung, and GlobalFoundries have begun to talk about a 450mm transition, while Intel is full steam ahead.

The logic is that while 450mm wafers are expensive in terms of equipment costs, in the long term you can make a lot of money.

GlobalFoundries has said that a 450mm wafer can yield 3,400 dies while a 300mm wafer yields just 1,450.

So, a 450mm fab with a 40 to 45,000 wafer starts a month will produce as much as a 300mm fab with 100,000 wafer starts a month. It is believed that 450mm wafers will save 20 percent to 25 percent in capital expenditures.

Cutting costs is all very well, but the whole project will bank on Intel's ability to sell the chips it makes. This could be a little tricky given the downturn in the IT industry. Chipzilla is already facing failing margins to sell its chips, and some of the savings it makes from 450mm wafers might just go to keeping its head above water.

According to ExtremeTech, Intel hopes to address this by moving to 14nm at the same time.

If a 450mm wafer packs 2.5 times the processors of a 300mm wafer, the cost-per-processor is far lower if and only if Intel can ship every single chip.

To achieve this, Intel really could do with widespread uptake of its Atom processors to justify the enormous build-outs the company has done at Fab 42 and now at Fab D1X.