Chartered to start making AMD processors in mid-2006

Singaporean contract chip maker Chartered Semiconductor Manufacturing will begin producing 64-bit microprocessors for Advanced Micro Devices late in the second quarter of 2006, a spokeswoman said Monday.

"We announced the plan last year, but it is on schedule for the second quarter," said Maggie Tan, a spokeswoman for Chartered, during a phone interview.

AMD signed a deal late last year to farm out the production of some processors, such as the AMD Athlon 64 and Opteron processors, to Chartered sometime in 2006. The start of the deal in mid-2006 indicates that AMD processors are competing well in global markets and its technology rollout has gone largely as planned, a rarity in the chip industry since a number of factors can sabotage product ramp up plans, such as market downturns, stiff competition with rivals, production troubles, chip design tweaks, and a lack of supporting components.

For end-users, it means more availability of AMD 64-bit products at a faster pace, and could help stave off any potential shortages.

AMD's other chip production partner is IBM, which has a technology development and licensing deal with Chartered.

Tan also said Chartered is in discussions with partners about plans to invest in China, but nothing solid has been determined yet.

The world's fourth largest contract chip maker by revenue projects it will spend $750 million on new production line equipment this year, but it does not yet have a forecast for 2006 capital spending, Tan said.

Chartered last week announced its third quarter financial results. The company turned to a loss of $34.5 million for the three months ended Sept. 30, from a $16.2 million net profit during the third quarter last year. Its revenue rose 13 percent compared to the same time last year to $290.1 million.

The company forecast it will turn a net profit of around $10 million in the fourth quarter, as it raises prices for its manufacturing services.