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Inside Intel's Fab World

By Olga Kharif To the untrained eye, Intel's campus, off NW 229th Street in Hillsboro, Ore., might seem like just another office park: a square, three-story, no-frills building made of red brick. Some chrome-and-white pipes peep out in the rear, exhaling vapor. The only hint that it's the Northwest's tech center is the sight of workers wearing jeans instead of office suits.

Beneath this unassuming façade, however, is a unique manufacturing facility. Intel (INTC), the largest chipmaker in the U.S., first built a factory on this site in 1995, a year after purchasing the 300-acre parcel just a 30-minute drive from downtown Portland. On a Jan. 28 visit, I was ushered through the lobby of the building known as RA1 and into the world's most advanced chip-manufacturing plant. It houses a trio of fabs -- industry lingo for fabrication facilities -- and is the home of a research lab known as Pathfinding.

A five-story building supports just a single production floor and keeps it dust-free. In the basement, boilers heat water, which is pumped to the floor above, where it's purified. Next, it's piped with special chemical solutions to the "clean room" above, where production takes place. Over that level, two more floors of coolers and purifiers control the clean room's airflow, which circulates through holes in the ceiling and floor tiles.

BUNNY HOP. In the clean room, workers wear "space suits" to maintain the pristine environment. The footbridges that connect the buildings double as changing rooms. With their endless rows of white coats, they look like the inside of a gigantic dry cleaner's. Workers change into their clean-room attire -- many jokingly speak of their "bunny suits" -- as well as gloves, booties, and special glasses. Rookies usually need around 20 minutes to don all the gear, but veterans can generally manage the transformation in less than five.

RA1's clean room is a huge, 100,000-square-foot factory floor cut into long, narrow rows of equipment and illuminated by a surreal glow that brings orange soda to mind. That light prevents overexposing the thin layers of film that are etched onto the silicon plates from which the chips will be stamped. A robotic arm grabs a basket of chip wafers from one machine, then scoots off and places it into another. A lone, space-suited worker patrols each row, monitoring the indicators above each machine to ensure quality control.

Two new fabs, each a footbridge away, are quite probably the world's most advanced semiconductor plants. Like the other fabs on this campus, they serve as blueprints for all of Intel's factories. The paint in the spotless corridors -- every wall devoid of pictures -- might come in different colors at other locations, but the layout and chipmaking gear never varies from one to the next. That represents a major strategic advantage for Intel, allowing it to get new fabs online faster than many rivals. The plants are also easier to maintain, notes Len Jelinek, an analyst with chip consultancy iSuppli. One new plant on the Oregon campus, D1C, is being cloned in New Mexico, Arizona, and Ireland.

TAXI SERVICE. RA1, Intel's oldest fab, makes silicon plates 200 millimeters in diameter. D1C, one of the newer fabs, puts out 300-mm plates. The larger plate size allows Intel to stamp 2 times more chips from a single wafer and at a 30% cost saving when a plant is running at full tilt, according to a company spokesperson.

Since batches of the larger plates are too heavy for humans to manage, Intel has equipped D1C with icebox-like "taxis" that run suspended from the 14-foot ceilings. When one stage of the process is finished, a taxi drops its lifter, grabs the batch, and takes it to the next manufacturing step.

Even though demand for chips remains sluggish, Intel continues to outfit fabs with new gear, despite the recent announcement that it would reduce this year's capital spending to $3.5 billion, down from the $3.9 billion originally earmarked -- and well below the $4.7 billion spent in 2002. Meanwhile, Intel continues to equip another 300-mm plant, D1D, which should be producing some of the smallest chips on the market by mid-2003.

WAITING FOR AN UPTURN. Intel says the added capacity will come in handy, since it expects demand to ramp up in 2003's second half. The D1D plant differs in that it features a new "ballroom" design. Instead of putting equipment in narrow rows, it'll be arranged in radial clusters. This saves space and makes it easier to install machines.

Intel is betting that such innovations in manufacturing will keep it at the forefront of semiconductor technology. Now, like the rest of the industry, it just needs a recovery in demand. Kharif covers technology for BusinessWeek Online in Portland, Ore.

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