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Chip plant is coming, AMD says

Chip plant is coming, AMD says

Local officials are expressing relief and excitement that Advanced Micro Devices Inc. confirmed plan

Local officials are expressing relief and excitement that Advanced Micro Devices Inc. confirmed plans Tuesday to build a $4.5 billion computer chip factory in the Luther Forest Technology Campus in Malta and Stillwater.

Construction is expected to begin next summer.

AMD spokesman Travis Bullard said the manufacturing operation will be a spinoff from the parent company and will be known as The Foundry Co.

He said the investment is now expected to be about $1 billion more than initially announced because the size of the facility has been increased by 30,000 square feet from the original drawings.

“When we announced the project a couple of years ago, it was expected the plant would be 150,000 square feet. The new design calls for a larger clean room in the facility and will increase the project to 180,000 square feet,” Bullard said.

Company officials said AMD is partnering with Advanced Technology Investment Company of Abu Dhabi to create the semiconductor manufacturing company.

The new global company, with operations in Dresden, Germany, Austin, Texas, and now in Malta, will combine advanced process technology, manufacturing facilities and “aggressive plans to expand its global capacity footprint,” officials said.

Hector Ruiz, AMD’s chairman and former CEO, announced the company’s renewed commitment to the Luther Forest project in a conference call Tuesday morning. Later in the day, he flew to Albany to meet with New York Gov. David Paterson.

After the meeting, Paterson announced the state will go ahead with its $1.2 billion subsidy for the project despite the state’s fiscal crisis.

“It could be one of the most significant technological developments this country has ever seen,” Paterson said. He noted, however, that two federal approvals are required for the major investment by a foreign company.

The project, Paterson noted, will employ nearly 1,500 people — and generate another 1,600 construction jobs — while making New York less dependent on volatile revenue from Wall Street, which has dropped sharply this year and is a major reason for the state’s current deficits.

New York has a $1.2 billion deficit now and an estimated $8 billion deficit for 2009-10, prompting cuts in spending that Paterson said could eventually hit school aid and the public work force.

“This is exactly the conversion the state needs to make, rather than relying on the economy of an entity for which we have no control,” Paterson said. He said the state’s increasing reliance on taxes from the financial sector — a fifth of all state revenue — was like “children in college relying on our parents’ expense account.”

Advanced Technology Investment Company, the Abu Dhabi company, will invest $2.1 billion to purchase its stake in The Foundry Co., of which it will invest $1.4 billion directly in the new entity and the remainder will be paid to AMD to purchase additional shares in The Foundry Co. The Foundry Co. will also assume approximately $1.2 billion of AMD’s existing debt.

“ATIC has committed additional equity funding to The Foundry Co. of a minimum of $3.6 billion and up to $6.0 billion over the next five years to fund the expansion of The Foundry Co.’s chip-making capacity beyond the manufacturing facilities initially contributed by AMD,” according to a company press release.

The funds will be used by The Foundry Co. to proceed with capacity expansion at its fabrication operations in Germany and to begin construction on a new state-of-the-art facility in Malta and Stillwater.

The computer chip factory is expected to create 1,465 high-paying jobs, which Malta town Supervisor Paul Sausville said will boost an economy that has slumped for decades with job losses from General Electric operations.

“This is great news not just for Malta but for the entire Capital District,” Sausville said. “We’ve been informed that 60 percent of the jobs will be technicians and they will be paid $40,000 to $70,000 a year. The remaining 40 percent of the jobs will be professionals making six figures — that is, more than $100,000 a year.”

While the plant will mainly be in Malta, a portion of the facility will be in the town of Stillwater.

Supervisor Shawn Connelly said his Town Board received its first set of amended blueprints for the fabrication operation last week.

“The plant will be built in stages with the first [fabrication section] completely in Malta,” he said. “Part of the second fab and almost all of the third fab will be in Stillwater.”

He said because construction on the first section will be in Malta, that is where planning approvals have been concentrated initially.

“We will have our first full meeting with AMD on Oct. 20,” Connelly said. “We’re very excited to finally hear the commitment has been made.”

Ruiz, AMD’s chairman and former CEO, visited the Luther Forest site in August and said he was impressed by progress that had been made in developing the park.

Company officials are scheduled to be back at the site this morning for an update with local leaders.

Regional business organizations were quick to issue statements, congratulating AMD on its decision to move forward with the project.

Center for Economic Growth President F. Michael Tucker said his organization “joins with the entire region in welcoming AMD and its new partners to Tech Valley. Today’s announcement is a milestone in regional cooperation and partnering between business, government and education.”

Kenneth Adams, president and CEO of The Business Council of New York State, added his approval of the announcement.

“This new company is ready to move forward with the construction of the manufacturing facility that will boost the upstate economy. New York state needs to support this project to create new, high-skilled, high-wage jobs,” he said.

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