GloFo seeks boost in tax relief

GlobalFoundries has now invested nearly $11.5 billion at its Fab 8 complex and plans to continue construction for at least another 15 months, a company official said Monday.

The new spending figure is the highest total yet from the company, though it had been widely acknowledged that GlobalFoundries was spending at least $10 billion setting up and equipping its gleaming state-of-the-art manufacturing facility in the Luther Forest Technology Campus, on the Malta-Stillwater town line.

The additional spending is driven by a decision to repurpose the new Technology Development Center to focus less on research than on commercial manufacturing to meet the needs of a major customer, although R&D will still take place there, said Thomas R. Lane, Fab 8’s tax manager. The TDC was originally going to cost $2.1 billion, but the company will be spending more than $3.5 billion on the facility, which will employ well over 1,000 people instead of the originally anticipated 600 to 800, he said.

The company is making 14-nanometer chips for devices like smartphones under an agreement with Samsung Electronics, under what is widely believed to be an arrangement under which Samsung makes chips for Apple, although none of the companies involved has confirmed that.

“We have well over 5,000 people coming to work at the fab,” Lane said during a presentation to the Saratoga County Industrial Development Agency.

GlobalFoundries on Monday asked the IDA to raise the limit on its IDA-established sales-tax exemption on building materials from $579 million to $662 million because of the additional costs. The IDA set public hearings on the request for Monday, Aug. 10, at 8 a.m. at Stillwater Town Hall and 8:45 a.m. at Malta Town Hall.

“They’re over [budget] by $2.4 billion, and they want to recover the sales tax. It’s our obligation to work with them,” said IDA Chairman Raymond F. Callanan.

The sales-tax exemption on construction materials is one of the economic development incentives used to encourage the Abu Dhabi-owned global chip manufacturer to invest in New York state. Its original tax-incentive deal with New York state committed the company to spending $3.2 billion on a semiconductor chip factory, and creating of 1,200 jobs.

“It’s a good thing all around. They’ve more than doubled employment from where they first planned to be,” Callanan said.

Despite the company’s extensive spending, Lane said the tax incentives it is asking for now are important.

“We need this approval to keep on growing and increasing jobs well beyond 3,000,” Lane told the IDA board.

According to Lane, in June the company had 2,886 full-time equivalent workers on its payroll, up from 2,544 in January.

In addition, there are about 400 contract workers inside the fab, as well as employees who work for nontechnical contractors like Janitronics and Mazzone Hospitality, which runs the Fab 8 cafeteria and caters to construction workers inside a large tent. In addition, there are about 1,500 construction workers currently at the site.

“This [approval] will guarantee those 1,500 workers work for at least the next 15 months,” Lane said.

Lane said the Fab 8 payroll, about $245 million in 2014, should exceed $350 million this year.

He emphasized that the number of local people hired has steadily increased since 2009-2010, when the first on-site employees were often experienced semiconductor workers transferring from other parts of the country or the world.

Ariel Dunster, a 23-year-old Ballston Spa High School and University at Buffalo graduate, joined the company in May as a tax analyst.

“I was looking in a lot of different areas, and I had a lot of friends who were engineers who were working at GlobalFoundries,” she said Monday.

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