State budget plan includes $46 million more for AMD

PHOTOGRAPHER: The Associated Press

State officials have budgeted $46 million to help Advanced Micro Devices Inc. build new factories in upstate New York even as the No. 2 chip maker announced this week that first-quarter sales were lower than expected and it plans to cut its global work force by 10 percent.

State, town and company officials said site planning and other advance work is continuing for the new Luther Forest Industrial Park in rural Saratoga County. Capital funding was included in the fiscal 2008-09 budget, which state lawmakers were approving Wednesday.

“At this point in time it’s full bore ahead . . . with the expectation that sometime around next January they’ll be able to start construction,” said Malta Town Supervisor Paul Sausville. About $32 million in bids for a 51⁄2-mile road project for the industrial park were let this week, while the county is building a water system that will also serve the site and a sewage treatment plant is being upgraded, he said.

Gary Silcott, spokesman for Sunnyvale, Calif.-based AMD, said the job cuts and upstate New York project, which would provide “additional capacity” instead of replacing an existing facility, are unrelated.

“We have not yet committed to the plan. We have until July 2009 to commit. But the New York plan has always been a long-term commitment,” Silcott said. The site plan envisions up to three factories, and construction won’t begin this year, he said.

“That won’t happen until after the agreement is signed and a commitment is made,” Silcott said. AMD said Monday sales for the three months ended March 29 were closer to $1.5 billion, a 22 percent jump over last year but 15 percent lower than the fourth quarter. It said job cuts, which amount to more than 1,600 workers out of 16,800 worldwide, were expected to start this month and end by September.

Kris Thompson, spokesman for state Senate Majority Leader Joseph Bruno, said state and local officials are in constant communication with the company.

“AMD’s moving forward and developing and implementing the necessary measures to ensure the plant will be one of the largest economic development projects in New York state history,” Thompson said. “We have no reason to believe it will be sidetracked.”

Bruno, whose district includes the site, joined in the June 2006 announcement of more than $1 billion in state funding and tax incentives for the planned $3.6 billion plant.

A statement from Bruno said $27 million of the budget funding will be used for infrastructure needs such as energy, water and sewer, and $18 million will be utilized for road improvements and construction. Another $1 million will go to operating support for the Luther Forest Technology Campus Development Corp.

Meanwhile, state Attorney General Andrew Cuomo in January announced an investigation into AMD’s chief rival, Intel Corp., for possible violations of state and federal antitrust laws.

Cuomo said his preliminary review showed a need for a full investigation. Subpoenas sought information on whether Intel coerced customers to exclude AMD from the market for a specific computer processing unit, including data about pricing strategies and whether it improperly paid computer makers for exclusivity.

John Milgrim, spokesman for Cuomo, said Wednesday the investigation is ongoing. There is no connection between the probe and AMD’s New York project, he said.

In 2005, AMD filed a lawsuit claiming Intel bullied major customers — PC makers like Dell Inc. — into exclusive deals and offered secret rebates.

Intel, which commands three-quarters of the worldwide microprocessor market, has denied AMD’s allegations and defends its business practices as legal and beneficial to consumers.

In July, the European Union charged Intel with violating antitrust rules by selling its chips below cost to strategic customers, among other practices.