This third-generation Chip-Multithreading (CMT) SPARC processor consists of 16 cores with shared memory architecture and supports a total of 32 main threads plus 32 scout threads. It is targeted for high-performance servers, and is optimized for both single- and multi-threaded applications. The 396 mm2 chip is fabricated in an 11 metal layer 65-nm CMOS process and operates at a nominal frequency of 2.3 GHz, consuming a maximum power of 250 W at 1.2 V. This paper provides an overview of the architectural highlights and describes the physical implementation challenges and solutions including circuit innovations in memory arrays, register files, and floating-point hardware that boost the performance and circuit robustness with low area overhead.