Yesterday was Intel research day where Intel showed off a wide range of research projects that aim to keep the company healthy in the near to long term. In the Computational Lithography demo area, Intel showed why its manufacturing process will keeps its business competitive. Intel showed off the fact that it will be stretching its dry lithography process in to the 45nm process and its late-stage research on Pixilated Mask lithography which has to potential to squeeze another die shrink out of existing manufacturing processes.
As Microprocessor processes shrink in to the 45 nanometer range, the accuracy of the process starts becoming limited by the wavelength of light. As the rest of the industry switches to immersion lithography (or wet lithography) for the 45nm process, Intel will stretch its dry lithography process in to the 45nm process. This enables Intel to release products by the end of this year well ahead of competitors like AMD while using a dry process that's tried and true. According to Intel's estimates, dry lithography will save them approximately 28% of the manufacturing costs over wet lithography. This is added to the fact that Intel's smaller 45nm process allows them to fit more CPU dies on to a single wafer which increases yields and further reduces costs.
This isn't to say that Intel has no intension of going to an immersion lithography process in the future because they'll have to do it for 32nm. Intel is already stretching dry lithography in to the 45nm generation when everyone else thought that was impractical. There is a possibility for extending dry lithography in to the 32nm process if Intel's research on Pixilated Mask lithography is mature enough to leverage. But if Pixilated Mask isn't ready in time for 32nm, it can be used in the future to shrink future generation processes.
Because keeping manufacturing costs lower than the competition is so critical in the microprocessor business, AMD is pushing hard for a mid-2008 launch date for their own 45nm process which is a very optimistic date. AMD has always lagged a year behind Intel's manufacturing and just as AMD catches up on 65nm Intel is moving to 45nm. Even when AMD catches up to 45nm, they'll be using a more expensive wet lithography process and Intel will be looking at 32nm. In a nasty price war where Intel has cheaper manufacturing, Intel gets to keep a small profit margin while AMD bleeds.