SARATOGA SPRINGS — The Capital Region’s success in the semiconductor industry has been noticed around the world, but needs to be nurtured if it is to sustain itself.
These are among the observations of the authors of a recent Georgetown University book about the Tech Valley success story, based on their multiyear study of it. Charles W. Wessner and Thomas Howell presented their work at a lunchtime discussion in Saratoga Springs on Monday, the opening day of the 2018 SEMI Advanced Manufacturing Conference.
SEMI is the global industry association serving the manufacturing supply chain for the electronics industry. Its president and CEO, Ajit Manocha, introduced the speakers with an overview of the semiconductor industry’s growth amid rapidly expanding demand for computer chips. Automobiles made today contain many more chips and sensors than those built a decade or two earlier, and those of the future will use enough that they might be called semiconductors with wheels, he said.
Semiconductors could become a trillion-dollar industry within a decade, he said.
“In order to make this happen, there is one more investment we all need to be very, very conscious about: The investment in human capital,” Manocha said. “We have thousands of jobs in Silicon Valley we can’t fill. … Human capital is becoming the key element of future success or barriers for success.”
Manocha was CEO of GlobalFoundries in 2012 and 2013, a landmark period for the Capital Region: That’s when the new Fab 8 chip factory in Malta began production.
The decades-long journey to that point, the continuing growth since and the potential for the future is at the heart of “Partnering to Grow the New York Nano-Cluster” by Wessner and Howell.
The transformation of a wooded area in Luther Forest into a $12 billion-plus computer chip foundry employing about 3,300 people with average salaries in the $90,000 range was part of a remarkable process by which the region branded itself as “Tech Valley” — provoking widespread skepticism — then made the vision a reality through cooperation and synergy between local, state and federal governments, industry and academia, he said.
“This story, the Albany story, is already known all over the world,” Howell said. “There’s people in Europe and the Far East that are interested in what's going on here. The success has been recognized.”
Wessner noted he first heard about Albany while studying Imec, a nanotechnology research and development hub in Belgium.
Howell said the colleges and universities in the Albany region were critical to the effort; perhaps first with Gov. Nelson Rockefeller’s heavy investment in the state university system; most certainly with the creation of the College of Nanoscale Science and Engineering on the Albany campus of what is now SUNY Polytechnic Institute.
Its complete 300 mm chip production facility -- a test bed where manufacturers could research, test and tweak new technology without the huge expense of building their own facility — was unique in the world.
Wessner, Howell and the other participants at Monday’s presentation — Mike Russo, director of government affairs at GlobalFoundries; Andrew Kennedy, president and CEO of the Center for Economic Growth; and Chris Fall of the U.S. Department of Energy’s Advanced Research Projects Agency-Energy — offered suggestions on how to maintain Tech Valley’s momentum:
-- Continued cooperation by local and regional governments and economic development organizations;
-- Continued investment in research and development;
-- More university-industry cooperation;
-- Greater effort to instill an interest in science and technology in children when they are young enough to latch onto it, particularly girls, who are greatly underrepresented in the industry;
-- Continued allocation of public tax dollars to foster development of the private, for-profit semiconductor industry.
This last point was controversial when GlobalFoundries was on the drawing board. Millions of dollars were invested in water, sewer, power and road improvements to get the site ready for a semiconductor factory, and $1.2 billion in taxpayer money subsidized the construction. With only 1,300 jobs projected to be created at the time, that was a whopping $923,000 per job.
But New York won the project because a rival proposal in Dresden, Germany, offered only a $1.1 billion subsidy, Wessner said. Other nations that offer subsidies would be happy to see America not offer them because it would be easier to attract projects such as Fab 8, he added.
Manocha, a native of India, closed the presentation with one other potential obstacle to the success of the semiconductor industry, both in the Capital Region and in the United States as a whole: changing immigration policies.
“Today we have many, many foreign brains in GlobalFoundries, IBM,” he said. “We are changing the immigration laws in the wrong direction. We bring the best of the best brains, give them the best education in this country, especially in this region with the best universities, then say goodbye, go help your own country.
“And we will have a major risk for our business if we don’t sustain the talent. In my opinion ... the talent is the catalyst to sustain and grow the ecosystem and our economy.”