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What you need to know for 06/22/2017

$300M more sought to expand GlobalFoundries chip plant

$300M more sought to expand GlobalFoundries chip plant

GlobalFoundries is seriously considering expanding the size of its $4.2 billion computer chip manufa

GlobalFoundries is seriously considering expanding the size of its $4.2 billion computer chip manufacturing plant while the building is still under construction, and is negotiating for an additional $300 million in state incentive money.

The company may spend an additional $2 billion on the expansion, which would make the Malta plant’s manufacturing “clean room” the largest in the world when it opens in 2012.

There would also be additional work force beyond the 1,200 to 1,400 people the plant already expects to employ, but the number of additional workers hasn’t been quantified.

The expansion plan grows from the success GlobalFoundries is having in selling chips from its state-of-the-art 300-mm facilities, a spokesman said. The Malta plant will also use the 300-mm wafer technology.

“We’ve got demand for our products, and that has us looking for ways to increase production to meet that demand,” said Travis Bullard, a GlobalFoundries spokesman.

GlobalFoundries officials have been in active talks for a few weeks with New York state officials about an additional $300 million in economic development incentives to encourage the new investment.

“We’re keeping all the discussions confidential, but we hope they will be resolved very soon,” Bullard said.

State officials also weren’t commenting, other than to confirm talks were taking place.

“We will be unable to comment while the negotiations are pending,” said Warner Johnston, a spokesman for Empire State Development, the state economic development agency.

GlobalFoundries is already receiving about $1.2 billion in state cash and future tax breaks for the plant, which began construction last July at the Luther Forest Technology Campus. It is due to open in late 2012, and be in full production in early 2013.

Now is the time for GlobalFoundries to look at expanding the plant, Bullard said, while construction coordinator M+W Group and other contractors are building the plant.

The addition can be done without delaying the plant’s construction timetable, Bullard said.

Contractors are currently erecting the shell of the 1.3-million-square-foot building, and could just keep adding. Any new addition would on the back of the building.

“We have a nice opportunity now, with construction where it’s at,” Bullard said.

F. Michael Tucker, president of the Center for Economic Growth in Albany, said the plan makes sense — and state incentives may be necessary because GlobalFoundries could be offered incentive packages elsewhere around the globe.

“It’s an opportunity the state should consider, and work with GlobalFoundries to be sure it expands here, and not somewhere else,” Tucker said.

Such incentives technically pay for themselves from new economic activity within a few years, he said.

The immediate payoff would be in additional or prolonged construction jobs, Tucker noted. More than 1,600 construction workers are expected to be working on-site by late this summer.

The key change being considered would add an additional 90,000 square feet to the chip-manufacturing “clean room,” bringing it to a total of 300,000 square feet.

“It would be huge,” Bullard said. “It would be the largest in the world.”

Most foundry manufacturing has been done in Asia. The Malta plant is already planned to be the largest foundry in the United States.

Foundries make computer chips to order for other companies — companies like Qualcomm, AMD and Toshiba that can’t afford the high cost of making their own chips, or need to add capacity quickly.

“The cost has become so prohibitive companies are not able to build their own facilities,” said Eric Choh, GlobalFoundries vice president for manufacturing.

Malta town officials said an expansion of the size being discussed won’t require a zoning amendment, but would need town Planning Board approval.

Town Building and Planning Director Tony Tozzi said it’s his understanding GlobalFoundries may file a site plan review application as soon as Monday, which would be the deadline to get on the April 20 Planning Board agenda.

“It’s not a big surprise,” said Malta Supervisor Paul Sausville. “The fact that they are looking at expanding is good news.”

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