Intel's chipset sortage has firstly emerged last summer, when the company shifted the focus of its production efforts on higher-end desktop parts. Corresponding to the "tight" supplies, Intel announced today its plans to build a new 300-millimeter (mm) wafer fabrication facility at its site in Kiryat Gat, Israel.

In September, Intel Spoksmen said the company had "sold out" of notebook chipsets, and said the shortage would extend into the "first part of 2006" - precisely the timeframe the company will launch its 945M chipset, a key component of 'Napa', the third generation of Intel's Centrino platform.

The new factory, designated Fab 28, will produce microprocessors in the second half of 2008 on 45 nanometer (nm) process technology. Construction on the $3.5 billion project, Intel's second 45nm factory, is set to begin immediately.

When completed, Fab 28 will become Intel's seventh 300mm wafer facility. The structure will include approximately 200,000 square feet of clean room space.

Intel currently operates five 300mm fabs that provide the equivalent manufacturing capacity of about eight older generation 200mm factories. Those factories are located in Oregon, Arizona and New Mexico in addition to Ireland where an expansion of Intel's 300mm capacity in Ireland (Fab 24-2) is scheduled to begin operations in the first quarter of next year. In July Intel announced plans to invest more than $3 billion to build another 300mm fab, Fab 32 in Chandler, Ariz.

Manufacturing with 300mm wafers (about 12 inches in diameter) increases the ability to produce semiconductors at a lower cost compared with more commonly used 200mm (eight-inch) wafers. The bigger wafers lower production cost per chip while diminishing overall use of resources. Using 300mm manufacturing technology consumes 40 percent less energy and water per chip than a 200mm wafer factory. Intel's 45nm technology, which will first be put in high volume production at Fab 32, will allow chip circuitry to be built at about half the size of today's standard 90nm technology.



Intel is scheduled to ship 'Broadwater', its next generation of desktop chipset, in Q2 2006.

Chipsets are already a key part of Intel's silicon sales, but their importance will increase through 2006 as Intel begins to offer more platform bundles, rather than simply sell discrete chips.