Santa Clara (CA) - Intel is lining up the fourth factory that will be producing the companies new 45 nm processor generation, which is scheduled to go into mass production in the second half of this year.

Fab 11X in Rio Rancho, New Mexico, currently produces 90 nm processors and chipsets and will be retrofitted to build Intel’s upcoming 45 nm processors in volume. The company said that it will cost between $1 and $1.5 billion to retool the fab, which brings Intel’s total 45 nm production investment to about $8 billion, excluding the capacity in the development fab D1D in Hillsboro, Oregon.

Following D1D, Intel will ramp 45 nm production in the $3 billion Fab 32 in Chandler, Ariz., late this year. A completely new fab (Fab 28) currently built for $3.5 billion in Kiryat Gat, Israel, will come online in the first half of 2008 ; Fab 11X is scheduled to begin production of 45 nm processors in the second half of next year.

Intel declined to comment on the production capacity of Fab 11X, but confirmed that it will be a high-volume facility. According to spokesperson Chuck Mulloy, the factory current provides a mix of 90 nm chipsets and processors on 300 mm wafers - the product mix it was originally designed to produce when it opened its doors in 2002. During the retooling process, the factory will remain operational and continue to produce 300 mm wafers ; however, Mulloy said that 90 nm production will be ramped down. He considered it to be "likely" that 11X will only be manufacturing 45 nm chips in H2 2008.

Meanwhile, Intel will be moving the 65 nm production capacity of the firm’s development fab D1D into the neighboring D1C facility in Hillsboro, Oregon. D1D will become the first 45 nm mass-production facility. It is also the location where Intel develops the 32 nm generation of microprocessors, which is planned to be released in 2009.

Intel’s first 45 nm processors will be built on the "Penryn" core, which will be offered in mobile, desktop and server/workstation flavors as dual-core and multi-die quad-core processors.