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What you need to know for 07/28/2017

Fab 8 to get $10B shot


Fab 8 to get $10B shot

The Abu Dhabi investment company that owns GlobalFoundries plans to spend an additional $10 billion
Fab 8 to get $10B shot
Exterior of Global Foundries on Friday afternoon.
Photographer: Marc Schultz

The Abu Dhabi investment company that owns GlobalFoundries plans to spend an additional $10 billion at Fab 8, its chief executive officer told the Reuters news agency on Friday.

The comments by Ibrahim Ajami, CEO of the Advanced Technology Investment Co., indicate a plan to invest in new equipment and not necessarily a second computer chip factory at the Fab 8 site, a company spokesman said.

“We have received commitments from Mubadala [a parent Abu Dhabi-government-owned investment fund] for an additional nine to 10 billion for expansion of our facility in New York,” Ajami said, according to Reuters.

GlobalFoundries spokesman Travis Bullard confirmed the accuracy of the article, but said it’s his understanding the investment would be in existing facilities at its Luther Forest complex.

“This [capital expenditure] will be primarily dedicated to the building out and ramping up of Fab 8 in New York to meet customer demand,” Bullard said. “My understanding is that it is for existing facilities and that we have made no decisions about 8.2.

“The money will be spent on fully building out Fab 8 in response to current [and future] demand. Typically this will include tooling, re-tooling equipment, ramping new products and investments in technology development.”

The manufacturing tools for semiconductor chips are enormously expensive, with a single piece of equipment costing as much as $100 million.

An investment in manufacturing equipment wouldn’t add to local sales tax revenue because manufacturing investments are exempt, but it could maintain employment for hundreds of construction workers already working at GlobalFoundries.

A $9 billion to $10 billion investment would roughly match what’s already been spent at Fab 8 over the past four years.

Such a large investment could also align with the possibility that the company is close to proceeding with Fab 8.2, a chip fabrication plant even larger than the first. The total investment for Fab 8.2 has been estimated at $14.7 billion, with nearly 2,000 additional permanent jobs created.

Whatever the investment is for, it’s good news for the region, said Malta town Supervisor Paul J. Sausville.

“It’s good for New York state, it’s good for the county, the region and the town to see this kind of investment in 21st century products,” he said. “I’m anxious to see what we can do to facilitate that investment.”

Fab 8.1 is still ramping up production in a 300,000-square-foot clean room. The company has invested $7 billion there to date and employs about 2,200 people, many of them in high-paying specialty fields. A $2.3 billion Technology Development Center is under construction, scheduled to open around the end of this year and employ an additional 1,000.

The towns of Malta and Stillwater, which both must approve projects at the Luther Forest Technology Campus, last August granted the necessary local approvals for Fab 8.2, following an intensive local review process. Since those approvals, however, GlobalFoundries has said nothing further about a commitment to build the plant.

There’s been widely reported speculation Malta could become the future location for manufacturing chips for Apple mobile devices, under an agreement with Samsung, which has made most of Apple’s chips.

Sausville, who became chairman of the Saratoga County Board of Supervisors on Thursday, warned in his inaugural remarks the community needs to be ready to provide additional water, gas, sewer and power to the Fab 8 site when GlobalFoundries wants it. He said he made those remarks with no advanced knowledge of ATIC’s investment plan.

“When we reviewed Fab 8.2, we assumed the infrastructure would be there. It’s a huge assumption, and the devil is in the details. If they are going to invest $10 billion, the state, the region and the county need to work cooperatively to be sure the infrastructure is in place,” Sausville said.

GlobalFoundries was formed in 2009 when ATIC purchased the manufacturing facilities of Advanced Micro Devices and Chartered Semiconductor. It also has manufacturing plants in Dresden, Germany, and Singapore.

GlobalFoundries makes chips by contract for other electronics companies and has more than 150 customers.

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