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What you need to know for 01/22/2017

Outlook 2013: Global Foundries becoming economic powerhouse

Outlook 2013: Global Foundries becoming economic powerhouse

The Capital Region’s first commercial semiconductor factory — a critical piece of the region’s evolu
Outlook 2013: Global Foundries becoming economic powerhouse
Construction work on foundation footings continues at Global Foundries to expand the exsisting Mechanical Central Utility Building at the Fab 8 campus.
Photographer: Marc Schultz

The Capital Region’s first commercial semiconductor factory — a critical piece of the region’s evolution toward a technology-driven economy — just keeps getting bigger.

GlobalFoundries Fab 8 was at one point the biggest private construction project in the United States, and the work there has never stopped, more than three years after the 2009 groundbreaking.

Touted as the most advanced computer chip plant in the world, Fab 8 today has 2,000 workers, and there are hundreds more still to come.

GlobalFoundries’ corporate sales growth — it was identified in 2012 as the fastest-growing semiconductor company in the world and the No. 2 foundry company in the world — is spurring activity at the local plant.

Fab 8 has only just started volume commercial production of the tiny chips, which go into smartphones, electronic sensors and computers and other devices.

But with the plant’s shakedown period barely finished, expansion plans are already under way. Production capacity is being increased, and work will start this spring on a new $2 billion research and development center, the Technology Development Center.

In anticipation, an estimated 300 construction workers a day are laboring through the winter on projects that will expand the site’s mechanical, water and gas utilities.

A $2.3 billion project is fitting up an additional 90,000 square feet of cleanroom space inside Fab 8, bringing the total to 300,000 square feet. That’s where the manufacturing is done, on tools that cost millions of dollars and etch electrical circuits on chips with light and chemicals, in an environment cleaner than a hospital operating room.

That work is already under way, to be done in 2014. It will bring GlobalFoundries’ investment at Fab 8 to at least $6.9 billion. On top of the that, the Technology Development Center, to be finished in late 2014, will mean nearly $2 billion in additional investment.

The technology center will bring another 1,000 jobs, increasing total on-site employment to 3,000.

But even beyond that, there’s serious talk about building a second manufacturing plant, which would incorporate even newer technology and could cost $10 billion.

The company on Feb. 1 applied to the two towns for zoning approvals needed for a second plant. While a company spokesman said the application isn’t any form of commitment, if the plan goes forward it would mean another 1,800 jobs, plus 2,500 construction jobs.

“It’s important for us to recognize that GlobalFoundries is committed to business in the USA and in New York,” GlobalFoundries CEO Ajit Manocha said. “They are running products that are simply the best in class and bringing more customers here.”

The company’s ongoing expansion has also meant that since 2010, when there were only a handful of people working in rented offices, GlobalFoundries has been hiring continuously.

Today, Fab 8 employees range from white-gowned technicians to engineers and administrators — some hired from local college training programs and others recruited from technology companies around the country and even around the world.

Total employment surpasses the 1,200 workers anticipated when Advanced Micro Devices inked a 2006 economic development deal with New York state — an incentive of unprecedented size that brought the chip plant to New York state in return for $1.4 billion in cash and future tax credits.

“We’re seeing huge investments from GlobalFoundries,” said Lt. Gov. Robert Duffy, Gov. Andrew Cuomo’s point man on economic development. “This is a tremendous return on the state’s initial investments.”

The expanded cleanroom will be one of the largest in the world, able to process 60,000 silicon wafers per month, each of which will be cut into hundreds of computer chips.

Each chip goes through hundreds of steps during a roughly six-week production process. Initially, the plant is producing 32- and 28-nm chips, though the chips are expected to keep getting even smaller.

Word of the planned cleanroom expansion had barely sunk in when GlobalFoundries and Gov. Andrew M. Cuomo in early January announced plans for the Technology Development Center, a 557,000-square-foot building with 90,000 square feet of additional cleanroom space.

In Albany to discuss the Technology Development Center, Manocha dropped strong hints that a second chip plant is being planned at Fab 8.

“Fab 8.2 will be close to a $10 billion investment when we are ready to proceed,” Manocha said. “We are committed to the state of New York.”

An investment that large could bring GlobalFoundries’ total New York investment to $18 billion — and perhaps silence critics of the $1.4 billion incentive package.

“The investments being made here are growing other industries and other jobs,” Duffy said at the January event announcing the new R&D center, which is not receiving any new state incentives. It qualifies, though, for state investment tax credits under the original incentive deal.

Manocha said GlobalFoundries — which also operates manufacturing sites in Singapore and Dresden, Germany — will do its most advanced research and manufacturing here.

“The new TDC will help us bridge between the lab and the fab by taking research conducted with partners and further developing the technologies to make them ready for volume manufacturing,” he said.

GlobalFoundries was established in 2009, when AMD’s manufacturing operations were merged with those of Chartered Semiconductor of Singapore. An Abu Dhabi government investment fund, which was then an investor in AMD, now owns GlobalFoundries outright, but AMD remains one of its largest customers.

Foundries make chips under contract for customers who don’t have their own factories — a growing industry niche Manocha said requires the company to offer customers the best and most innovative technologies.

The company has about 160 customers.

Researchers here have developed 20-nm and 14-nm chips, and the company in the next year or two will be commercializing them, said GlobalFoundries spokesman Jason Gorss.

The Technology Development Center will develop new chip designs, building on the research being done at the University at Albany’s College of Nanoscale Sciences and Engineering.

CNSE is a powerhouse institution in its own right, with $14 billion in state and private investment and 2,700 people working or studying there. Next-generation 450-mm silicon wafers are being developed at the college, with GlobalFoundries among the research partners.

Manufacturing today is now done from 300-mm wafers, but the TDC will be designed to handle 450-mm wafers, which should use silicon more efficiently.

“CNSE has been a great partner to GlobalFoundries from the beginning,” said Gregg Bartlett, GlobalFoundries’ chief technology officer. “In many ways, the TDC is the final link on our overall strategic innovation pipeline.”

In addition to employing its own people and hundreds of construction workers, the chip plant supports outside jobs ranging from those at trucking companies and warehouses to fast-food restaurants and hotels.

GlobalFoundries’ launch has meant more business for the hotels and motels around Saratoga Springs, said Todd Garofalo, president of the Saratoga Convention and Visitors Bureau.

GlobalFoundries has been bringing employees from around the world to Saratoga for training or temporary assignments at Fab 8. They are sometimes staying in local hotels for weeks, Garofalo said — or using commercial lodging while they learn the area and shop for a house.

“We are definitely seeing an impact from GlobalFoundries,” Garofalo said.

Town officials in places like Halfmoon and Clifton Park say GlobalFoundries employees are one of the factors behind a demand for new housing — good news for home builders and the people who work for them.

But the news out of Luther Forest isn’t entirely upbeat. The expansion of its large tenant means headaches for management at the Luther Forest Technology Campus.

Given the amount of power GlobalFoundries is using, the electrical and natural gas infrastructure built less than a decade ago is looking inadequate, if the park is to attract any more tenants or even meet GlobalFoundries’ future power needs.

The 1,414-acre park was set up in 2004 as a site for high-tech development, and that’s when the infrastructure was designed. The campus is run by a private, nonprofit corporation, the Luther Forest Technology Campus Economic Development Corp.

Because of the difficulty the corporation has had selling additional lots or developing new sources of revenue, there’s been a lot of talk about changing the park’s ownership to a public-private partnership, but no action.

“When we built this, we were 99 percent ahead of the world in sizing our infrastructure,” said Michael Relyea, president of the LFTC Economic Development Corp. “Now the competition has caught up.”

The state spent about $100 million on initial development of the technology campus, during the 2000-2008 period when Republican George Pataki was governor and Joe Bruno, with his strong interest in Capital Region economic development, was the state Senate majority leader.

But there’s no indication state officials are willing to put more state money into the campus, absent an ownership stake.

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