Sun, Jul 26, 2009 page12

• Ailing New York betting big on a high-tech future

  In one of the most heavily subsidized plans in the state’s history, upstate New York will build the world’s most advanced chip plant

  • By Nicholas Confessore / NY TIMES NEWS SERVICE
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  A decade ago, it was 90 hectares of pine trees near Saratoga Lake. A decade from now, it could be the booming heart of a new high-tech corridor filled with some of the most sophisticated labs and plants in the country.

  After years of haggling and setbacks, officials finally broke ground on Friday on a US$4.2 billion plant that will manufacture advanced microprocessors and be the most advanced facility of its kind in the world. The plant will be bigger than the Jacob K. Javits Convention Center in Manhattan.

  Elected officials are counting on the expected completion of the factory in 2011 to provide a major boost to the ailing upstate region, where for years they have promised, and mostly failed, to deliver an economic resurgence.

  The plant, which will manufacture chips for California-based Advanced Micro Devices (AMD) and other chip design firms, will generate 1,400 new manufacturing jobs, officials say.

  With the new factory as an anchor, officials say they can attract more investment to the area, building a cluster of businesses and academic centers that could ultimately rival Route 128 outside of Boston or North Carolina’s Research Triangle.

  “You’ve got everything in place here to make the whole upstate region a leader in chip fab manufacture and high technology generally,” said Charles Wait, president of Adirondack Trust Corp, a bank that helped finance early efforts to bring tech companies to the area.

  “When I grew up, you couldn’t find a job here in Saratoga and everyone left after college,” Wait said.

  The plant will receive US$1.37 billion in state aid over 15 years, making it one of the most heavily subsidized projects in state history. About half that money is capital aid that was appropriated in this year’s budget, a considerable gamble at a time of severe economic crisis.

  “I was concerned about the value of taxpayer dollars versus the number of jobs that would be created,” New York Governor David Paterson said at a news conference after the groundbreaking. “But when I started to see that we would move to global leadership in semiconductor development, I then realized that these are where the jobs of the next decade can come from.”

  The plant is also a gamble for AMD, the world’s second-largest producer of computer chips.

  Since January, the company has posted hundreds of millions of dollars in losses and it expects sales to continue declining. In March, it teamed up with Advanced Technology Investment, created by the Abu Dhabi government, to spin off GlobalFoundries, which will build and own the New York plant.

  The Abu Dhabi backing will provide a hedge against threats to the project posed by the US recession.

  While chip design is a big business in the US, most chips are manufactured in China, Taiwan and Singapore. The factory here, some experts say, will help make the country globally competitive in chip manufacture for the first time in years.

  “The grants and tax support level the playing field on a global basis,” said Douglas Grose, chief executive of Global Foundries. “We looked all over the world for the next site. Every country that wanted a facility like this stepped forward.”

  For state development officials, the groundbreaking was the culmination of more than a decade of planning that began during the administration of former New York governor George Pataki.

  Before the state could entice an advanced chip factory to the region, they had to build the infrastructure to support it. That included new roads, utility upgrades and new academic centers, including an institute for nanotechnological engineering at the State University at Albany.

  “There were times when we had some doubt,” Grose said.

  Even after AMD settled on the project site in 2006, there were hurdles: zoning issues, the company’s financial difficulties and a need for more state funds. To smooth the way, Paterson negotiated a labor agreement under which the factory will be built mostly by New York workers.

  At Friday’s ceremony, a mound of dirt was piled in an air-conditioned tent with seven shovels ready for the groundbreaking ceremony — one for each of the speakers. Champagne awaited in an adjoining tent. The lineup of officials included Paterson, Pataki, US Senator Charles Schumer and Joseph Bruno, the former state Senate leader who retired last year.

  Bruno said he was so eager to see the project through that he had put off retiring.

  “I knew it was going to happen,” he said.

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