AMD Forges Ahead in New Chip Technology

Advanced Micro Devices(AMD) may not know where its chips will be manufactured in the future, but the company is making strides in developing technology for factories to produce ever faster microprocessors.

On Tuesday, the Sunnyvale, Calif., company announced details of a working test chip it claims lays the groundwork for next-generation microprocessors featuring smaller transistors.

AMD produced the test chip in partnership with IBM using Extreme Ultra-Violet lithography, a type of lithography that uses a shorter wavelength of light than today's standard lithographic tools. The shorter wavelength means the circuits on a silicon wafer can be etched at a smaller size.

"This important demonstration of EUV lithography's potential to be used in semiconductor manufacturing in the coming years is encouraging to all of us in the industry that benefit from chip feature sizes shrinking over time," said AMD's Bruno La Fontaine, who presented details of the chip at the SPIE Advanced Lithography conference in San Jose, Calif., Tuesday.

Chip companies continually seek to shrink the size of transistors in order to boost performance and reduce costs -- a phenomenon known as Moore's Law.

AMD said the test chip features 45-nanometer transistors. But EUV's real promise involves future generations of microprocessors with transistors measuring 22-nanometers and below, dimensions at which today's optical lithography tools are no longer expected to be viable.

According to AMD, the chip industry is expected to begin producing 22-nanometer chips in 2016.

Various companies are experimenting with EUV lithography, including Intel.

AMD and IBM have demonstrated an important step in showing the promise of EUV, says Len Jelinek, an analyst at iSuppli who covers semiconductor manufacturing.

"I think it bodes well for the teams as a potential solution," says Jelinek.

But he notes that AMD and IBM still have a ways to go in terms of demonstrating the technology's viability for manufacturing chips in large volumes.

AMD's use of EUV lithography on the test chip involved only the metal interconnects that link the various transistors. The next step, said AMD, will be to use EUV lithography not just for the metal interconnects, but for all of the microprocessor's critical layers.

Shares of AMD were up 1.9%, or 13 cents, at $7.10 in midday trading Tuesday.

The news comes at a time when AMD is exploring alternative manufacturing strategies. AMD currently has two chip fabrication facilities in Germany, as well as a partnership with contract manufacturer Chartered Semiconductor Manufacturing.

But the massive capital spending required to expand and upgrade microprocessor manufacturing facilities has prompted AMD to consider shifting more of the company's chip manufacturing to third parties.

According to iSuppli's Jelinek, the time and effort that AMD has devoted to innovating with EUV will not be wasted if the company ultimately hands-off most of its chip production to a third-party.

"The knowledge gained by these R&D groups will transition along with however the company reorganizes itself within industry," he says.
Source: thestreet.com