Dr Weimer made his comments as the Dubai Airport Free Zone Authority was confirmed as a private equity investor in his latest venture, German foundry start-up Communicant Semiconductor Technologies.

Communicant, which is specialising in both CMOS and SiGe:C processes, has also just secured backing from Intel and the Investment Bank of the State of Brandenburg in a $325m funding round that will allow construction of its fab in Frankfurt to be completed.

Dr Wiemer, CEO of Communicant, said Dubai had boarded the project because it wants to diversify its economy from one based almost wholly around the exploitation of natural resources, and sees high technology manufacturing as a strong option.

"Dubai is interested in acquiring the know-how of how to manage high-tech manufacture," Dr Wiemer said. "This investment will give them that."

He added that Dubai could begin building its first fab in 2004 probably targeting a 0.13um or 90nm process.

Communicant is not breaking down the specific investments made or equity stakes received in this funding round. However, it is known that Intel's contribution will guarantee it a 20% share of capacity and an option on a further 10%.

With the $325m in place, Communicant expects to start production at the $1.3bn Frankfurt fab in September 2003. It will initially have 0.18µm process technology.

Communicant had already secured roughly $1bn in funding before this latest round. It has $350m in European regional assistance and $650m in European Investment Bank loans guaranteed by the German government.

"This round now fully funds our business plan. We have now secured the funds necessary for a speedy completion of our facility," Dr Wiemer said.

Apart from Intel, which has "vowed to make every best effort" to use its 20% capacity share, Dr Wiemer said no other customer had yet been confirmed, but added that this was not a concern at this stage.

"Would I sleep better if we had 90% [booked]? Yes, but it's unrealistic. We believe our technology will be sufficiently attractive to sell the rest.

"In any case, the business plan calls for a fairly conservative two-and-a-half year ramp up period. We have the option for doing it quicker. We can ramp over anything from six to 10 quarters," Dr Wiemer said.

"It's one of the nice things about a chip factory. If the market continues to be soft, and we don't think it will, we can delay additional capacity installation."

Full capacity will be 30000 200mm wafer starts per month but the company expects to run 5000 starts at its opening.

When fully staffed, Communicant will employ 1300 workers but expects to begin operation with around half that number.