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Advanced Micro Devices Inc., fresh off of its announcement earlier this week that it had entered an alliance with Sun Microsystems Inc., said this morning that it had broken ground on a new 300-mm manufacturing facility in Dresden, Germany.

Fab 36, which will begin volume production in 2006 and will employ about 1,000 people, is the result of demand for AMD’s 64-bit processors, Opteron and Athlon64, according to CEO Hector Ruiz.

“Positive customer response and increasing momentum for our AMD64 processors make it clear that the time is right to expand our manufacturing capacity in order to effectively meet future demand,” Ruiz said in a prepared statement. “Our aggressive push into the enterprise computing market continues to gain traction, as evidenced by Sun’s recent adoption of the AMD Opteron processor and the growing success of server and workstation solutions from IBM, Fujitsu Siemens and others.”

At Comdex in Las Vegas, Sun and AMD announced a partnership in which Sun, starting early next year, will roll out a line of low-end Sun Fire servers powered by Opteron. The alliance will add fuel to Sun’s push into the low-end x86 space and give AMD, of Sunnyvale, Calif., a second major OEM partner to adopt Opteron. IBM earlier this year unveiled the eServer 325, an Opteron-based system aimed at the high-performance computing space. AMD is hoping Opteron will enable it to chip away at Intel Corp.’s dominance in the enterprise server space.

In addition, the two companies will work together to expand the number of systems based on the chip, including servers holding more than four processors. Currently, customers can run Solaris on Opteron in 32-bit mode; 64-bit Solaris for Opteron will be available in the second half of 2004. The two companies also will create an iForce Partner Program for software vendors and developers who are writing or porting applications to Solaris. The program will include a developer resource kit.

Sun, of Santa Clara, Calif., will use Opteron in a line of low-cost two- and four-way Sun Fire servers that will begin shipping in early 2004.