It was only a staged turning of dirt, but the groundbreaking ceremony Friday for the GlobalFoundries computer chip factory stands for a high-tech economic transformation that will affect the whole region, speakers said.
“This project will fuel long-term growth in the Capital District and cement our state’s reputation as a world leader in New Economy innovation,” said Gov. David Paterson. He readily conceded he was initially skeptical when first approached four years ago, while state Senate minority leader, about the state’s making an investment to bring the project to New York.
“I said this was one of the poorest investments we could make. It would be wasteful. It would not create jobs,” he recalled.
But many hours of conversation with former governor George Pataki and former Senate majority leader Joe Bruno changed his mind, he said.
“Whatever investment we make will be repaid over and over,” Paterson said Friday. He put the state’s investment at $1.37 billion.
Paterson, U.S. Sen. Charles Schumer and other high-profile leaders were on hand to celebrate the start of work on the $4.2 billion Fab 2 computer chip plant, to be built at the Luther Forest Technology Campus.
More than 50 acres of forest have been cleared in the last five weeks, and actual building construction won’t start until September. Earth-moving equipment continued to work a few hundred yards away as the ceremony was held before an invited audience of more than 300.
“This is an exciting day for us. [This plant] represents a model for the partnership of public and private sectors for technology and innovation,” said Hector Ruiz, GlobalFoundries’ chairman, who served as master of ceremonies.
The 1.3 million-square-foot factory will take about a year to build. There will then be another year in which the sensitive and expensive computer-chip manufacturing equipment is installed, and another year of testing and ramp-up before full production starts in 2012.
The plant will have about 1,465 permanent employees, and in the meantime the construction project will employ up to 2,000 people.
“This will be the world’s most advanced semiconductor manufacturing facility,” Ruiz said.
The plant will produce 300-mm wafers for cutting into tiny 28-nanometer chips — smaller than current cutting-edge technology. A nanometer is one-billionth of a meter.
GlobalFoundries is the company formed in March as a partnership between Advanced Micro Devices and Abu Dhabi government investors, to take over the manufacturing operations that were responsible for much of AMD’s multibillion dollar losses in the last two years.
GlobalFoundries operates the former AMD chip plants in Dresden, Germany, and the Malta plant as “foundries,” or factories that make computer chips to order for multiple customers.
To date, AMD is GlobalFoundries’ only customer, but company officials have recently said it will soon announce a second customer. “I look forward to hearing about new customers joining the family soon,” said Dirk Meyer, AMD’s CEO.
Having multiple customers is generally the key to economic viability for foundry plants, most of which are located in Asia. This will be the first U.S. chip foundry.
“Stay tuned next week,” GlobalFoundries CEO Doug Grose said when asked about prospects for signing another customer after the ceremony.
On stage, Schumer used visual props — a bag of convenience store potato chips, and a 12-inch silicon computer chip wafer.
“For 150 years, Saratoga was known for chips,” Schumer said. “The potato chip was invented here. Now it will be known for another kind of chip.”
The officials who first pitched the Capital Region and its economic and educational resources to the computer industry years ago, though now out of office, were also on hand.
“This isn’t just another groundbreaking. It is the largest investment ever made in this state in a manufacturing facility, by an order of magnitude. It is one of the largest investments ever in a manufacturing facility in the United States,” said Pataki, who with Bruno negotiated the state incentive deal with AMD in 2006.
Bruno, who resigned from the state Senate last year amid an FBI probe of his business dealings, sat in the front row, but did not speak.
Officials say up to 5,000 more jobs may be created in the industries that typically supply and support a large computer chip plant — and some of those companies are already showing interest.
The Saratoga Economic Development Corp. on Thursday night hosted an event in Saratoga Springs that a number of prospective industry suppliers attended.
“Our thing was to tell them when they’re ready, we have resources,” said Dennis Brobston, the SEDC president. “If we don’t have a site in Saratoga County, these companies will definitely land somewhere in the region. We’re very optimistic we can get these things moving quickly.”
Malta Supervisor Paul Sausville, who received two checks totaling $1.1 million on Friday as part of a community benefit agreement with GlobalFoundries, said he wasn’t surprised the long-simmering plans are coming to fruition, though it has taken years. The many delays and the industry and general economic downturns had left at least some people skeptical.
Sausville noted the two towns have worked closely with AMD and GlobalFoundries for more than a year on a variety of zoning and planning issues.
“We’ve known all along they wouldn’t put this kind of energy into it if they weren’t committed,” Sausville said.
Paterson, speaking to reporters after the ceremony, acknowledged there are still people who think the project will fail.
“Right now, this is an immense opportunity, and you’re not going to move forward without a certain amount of risk,” Paterson said. “I do think this is a wise investment. I think years from now people who were opposed to this will not remember it.”
GlobalFoundries has bought 223 acres, enough land for up to three computer chip plants to be built over the next 25 years, if the first one succeeds.
The groundbreaking took place in a huge tent erected on the periphery of the property, some distance from the heavy equipment.
Brian Parlman, general supervisor for project construction manager M+W Zander, said the clearing and leveling of the land in preparation for actual construction still has weeks to go.
“In about another month, you’ll see this site absolutely flat,” he said, gesturing to the ridges where earthmovers worked. “Foundations will be poured around the first week in September.”