March 10, 2009 Chip fab brings hope of jobs "It's a great day for Saratoga County," says official with regional economic center
By LARRY RULISON, Business writer
First published in print: Thursday, March 5, 2009
MALTA GlobalFoundries Inc., the spinoff from Advanced Micro Devices Inc. that plans a $4.2 billion computer chip factory in Malta, showed off its new name and brand Wednesday to much fanfare.
The day ended with a reception attended by about 200 people at the company's new office at Saratoga Technology & Energy Park, known as STEP, a short distance from where the new chip fab will be built.
But most of the excitement was swirling around the idea that the project would create thousands of new jobs at a time when the recession is forcing companies large and small to lay off workers.
"It's a great day for Saratoga County," said F. Michael Tucker, president of the Albany-based Center for Economic Growth, which promotes regional business development. "To have this announcement in this economy is wonderful."
GlobalFoundries has leased 9,000 square feet of space at STEP while it builds what will be called Fab 2 at the adjacent Luther Forest Technology Campus.
Hector Ruiz, chairman of GlobalFoundries, attended the reception along with other key AMD and GlobalFoundries executives. Ruiz was chief executive of AMD when the company announced in June 2006 a deal with New York state to build the facility at Luther Forest in exchange for $1.2 billion in cash and tax incentives.
Last fall, AMD said it would spin off its manufacturing operations into a joint venture with investors from the Emirate of Abu Dhabi. That deal, which provides AMD $825 million in cash and frees up $1.1 billion in debt, was finalized Monday.
The deal allows AMD, which will be GlobalFoundries' first customer, to focus exclusively on chip design and marketing while shedding the expensive manufacturing operations.
"This will obviously be a good shot in the arm," said Ward Tisdale, AMD's director of global community affairs. "It will allow us to not have to build fabs."
Terry Caudell, GlobalFoundries' project manager for Fab 2 in Malta, said the company expects to start clearing ground at Luther Forest in April, and is in negotiations with M+W Zander to become the general contractor on the project.
M+W Zander also built the Albany NanoTech complex on Fuller Road near the University at Albany.
GlobalFoundries expects the fab to start full production by 2012. It will employ 1,465 people, while construction activities will employ thousands more.
"We have every expectation that that's the timetable we're going to stay on and committed to," Caudell said.
At a Wednesday morning news conference to announce the new name, Ruiz said that even back in 2006 AMD was envisioning a new business model where it would possibly separate its fabs from the design business.
The model, known as "asset smart," wasn't explained fully until October, when AMD announced plans for the joint venture with Advanced Technology Investment Co., a fund owned by Abu Dhabi. The new venture took the temporary name of The Foundry Co.
"We had that idea in 2006," Ruiz said. "It took a little longer than expected."
Ruiz said the board of GlobalFoundries will meet in coming weeks to decide officially whether to move ahead with the Luther Forest project. Under the incentive package, GlobalFoundries has until July 31 to notify the state about its plans and still be eligible for a $650 million cash grant to help build the factory.
Ruiz said it was fair to say that the board decision was a mere formality.
"I think everyone knows what we're going to do," he said.
