AMD Receives $683M for Dresden Plant

Cocooner writes "Infoworld has an article explaining how AMD received $683 million in grants from Germany and the state of Saxony for its next-generation microprocessor wafer facility. The new plant will be located in Dresden, adjacent to Fab 30 and will be called Fab 36. It will be the first AMD 300mm manufacturing facility."

Comments

What about returns ??

[shamir_k]

How much new revenues will this new plant bring into Dresden? 600 million plus seems an awful lot of money to get just 1000 additional jobs.

Unless the city going to get substantial revenues from taxes, or increased business opportunities for vendors, it seems like a huge waste of money.

Re:ROI?

[rif42]

employing 1000 highly skilled workers

Most of these jobs will likely not need to have much special skills, chip fab work is in some way just another form of assembly line work. I guess it is at most 200 of them that needs to be highly skilled.

Other than that I think your argument of an ecomony knock-off effect do hold.

Re:ROI?

[davegust]

they are probably figuring that the plant will make suppliers and customers of AMD move nearby

Wafer fabs usually spend a relatively small amount of money in local economies. The bulk of the cost of a new fab is allocated to new equipment, which is mostly imported from the U.S. and Japan.

Still, there are the 1000 local permanent jobs, local jobs for construction of the actual building, money spent by equipment vendors support personnel in hotels, local costs for water and power, and local taxes.

A fun anecdote regarding water consumption: I write software for wet benches. I shipped a bug once to a fab in Phoenix that caused their DI water consumption to skyocket. The fab's DI water plant hit max capacity, and the City of Chandler had problems keeping up with the plant's consumption.

Here in Boise, local philanthropist J.R. Simplot built the city a park with a dozen or so soccer fields. The real purpose behind this park - a place to distribute processed waste water from the Micron plant. Not that I have any problem with that.

Re:ROI?

[HungWeiLo]

I apologize for not being able to answer your question. I live in the US, you see. I am not familiar with the concept of government incentives and payments in exchange for favors from the corporate sector. Not only that - I live in a state which will give 2+ billion US, free training to their workers, freeway expansion around their facilities, and a free cargo dock to our favorite corporate entity in exchange for 1,200 jobs. But since our state government knows best, it must be done because it has a tremendous ROI.

Advancements are a wonderful thing

[locutus2k]

It is nice to see AMD expanding its company. I have been using AMD chips for several years now, and couldn't be happier. When a company spends the time and money to make developments in arcitecture, they should get something nice in return. Unfortunatly I don't feel intel has been making the advances. The Intel name has been carrying them for a while now, and its time AMD got their recognition.

I've been using the Athlon64 chips and couldn't be happier. Hopefully the new plant will help them nibble away another part of Intel's market share.

Re:In Socialist Germany

[EinarH]

The concept of the classic welfare state (Germany, Denmark, Sweden and Norway) with socialism and a market controlled economy is not about taking away all off your return for hard work. It's more like the government takes a slice of it. So you won't get filthy rich if you work hard, you just get rich.

And about the philosophy; even if you don't filthy rich most people have other motivations besides money for working hard. As long as people feel they get an appropriate share of the material growth they are happy.
So I don't think much of the ambition is removed from the individual as there is no signs that the progress of society halts in these countries.

Good for the city

[giminy]

I lived in Dresden last year, and things haven't been too wonderful there since reunification. Lots of people have been leaving the city to head west, where there are better jobs. The city of Dresden actually pays people 300,- just to move there from other parts of the country (I think some other cities in the eastern part of the country do this as well). That money will easily cover the first month of rent in most areas of the city -- everybody I met would pay about 150,- per month.

That said, this will certainly help bring a little more 'balance' to the country (the Dresden VW plant also helps). 1000 high-paying jobs means potentially 1000 families...lots of little kids that need schoolteachers, food, clothes. I'm sure that the AMD plant will bring in way more money than this in taxes after a few years anyway...