May 28, 2010 The foundry effect: As GlobalFoundries builds its Saratoga County chip fab...... The Business Review (Albany) - by Barbara Pinckney
John D'Alessandro remembers a time when he told people in Silicon Valley he was from New York, and they chuckled.
Now you say I'm from New York and you automatically start a conversation, said D'Alessandro, vice president of public affairs for Zone 5, an Albany communications firm. They know Tech Valley.
Zone 5 has been attending SEMICON West, a microelectronics trade show in San Francisco, for 12 years. During that time, the Albany area was gradually gaining national attention for the work being done at the University at Albany's College of Nanoscale Science and Engineering; Sematech North in Albany; and Rensselaer Polytechnic Institute.
Then came the news of semiconductor manufacturer GlobalFoundries plant in the southern Saratoga County town of Malta. Tech Valley was on the map.
The $4.2 billion plant will not open until 2012, but the impact is already being felt in unexpected ways. Public relations isn't the first industry you'd think of as benefitting from this project. But companies in and outside of the area are positioning themselves for the expected economic boom. And firms like Zone 5 are lining up to help.
We're already seeing the ripple effects, said Eric Wohlleber, a senior account executive with Zone 5. Larger PR companies like us will benefit and smaller ones, too. The solo practitioners who started a few months ago will be able to see it, if they haven't already.
Welcome to Tech Valley
Local PR firms, particularly the smaller ones, have little expectation of working with GlobalFoundries itself. Some do, however, hope to nab business from the dozen or more suppliers that tend to follow chip fab plants into new markets.
Zone 5 set up an office in Silicon Valley earlier this year, with the idea of catching those companies now. D'Alessandro gave the example of Applied Seal N.A., a Newark, California-based maker of o-rings and gaskets used by the semiconductor industry. Applied Seal hired Zone 5 to help it make connections here.
Tom Nardacci, president of Albany-based Gramercy Communications, is working to lure technology and support companies to the area as PR representative for the Arsenal Business & Technology Partnership, the group formed 10 years ago to promote the Watervliet Arsenal to the private sector. Earlier this year, M&W US Inc., the general contractor of the chip fab plant, moved its North American headquarters to the arsenal.
My work for the arsenal has changed in the past year or so, Nardacci said. We were promoting it within the region. Now I'm promoting it nationally. We want to attract more high-tech companies.
He is developing a new strategic communications plan for the arsenal, and updating its website.
'Wake-up call'
While some suppliers will move to the area to work with GlobalFoundries, already-local businesses also want a piece of the pie, and are seeking help from local PR firms to get it.
D'Alessandro said a law firm approached Zone 5 to help it catch the eye of the West Coast companies.
Once the supply-chain companies get here, it is too late, he said. You need the relationship before that. We expect to see a lot more clients like that law firm.
Dave Mahoney, CEO of Awesco, an Albany-based supplier of gas and welding equipment, has been preparing for the arrival of GlobalFoundries for years.
We are the area's largest independent distributor of specialty gases, he said. And GlobalFoundries will use a fair amount of specialty gases.
Awesco supplies Albany Nanotech, but its $10 million in sales make it a little guy in the eyes of a GlobalFoundries. The company also hopes to appeal to the suppliers, which may need its industrial equipment.
We needed help getting the word out about who we are, Mahoney said. He therefore asked Shorey Public Relations LLC in Saratoga Springs to help Awesco rebrand itself.
Missy Shorey, CEO of Shorey PR, said the task for local PR firms is to elevate clients in the eyes of the newcomers.
It is not just about being local, it is about being world-class and, conveniently, local, she said. That is the big secret sauce. This is wake-up call for the PR industry locally.
Dan Pickett, CEO of nfrastructure, a Clifton Park-based information technology company, said it is vital that companies that want to work with GlobalFoundries or the ancillary businesses develop a clear message to communicate their value to these potential clients. He noted that companies like GlobalFoundries operate at the highest level of performance and expect their suppliers to do the same. He is working with two firms, Shorey and Albany-based Baker Public Relations, to get his message out.
Nfrastructure, which has sales of $20 million, already has found work in building out the computer network and providing IT support at GlobalFoundries' temporary headquarters in Malta. Its goal now is to secure work at the plant itself.
Solid foundation
It seems clear that GlobalFoundries and its followers will raise the fortunes of tech-focused firms like Zone 5, Grammercy and Shorey PR.
I focused on tech from day one, Shorey said. I said, 'if these guys are coming, we need to be positioned for that.'
Her 6-year-old firm did $1 million in business last year.
Nicole Messier formed her technology PR practice about a year ago, after returning to the area from Silicon Valley. She started as a freelance consultant, but demand for her services led her to open Portfolio PR Group in Saratoga Springs.
We have some great technology companies here that do very little national brand awareness, she said. If we can do a better job of marketing the local tech brands it will raise awareness of the area as a whole.
Messier expects Portfolio PR to do about $500,000 in business this year.
Would we be here without GlobalFoundries and nanotech? she asked. I think we would because I have none of that in my portfolio. But, with that said, the clients I am getting are sticking here because of the growth. So there is a niche for us, because of that foundation.
The next ring
As that foundation grows, so will the ripple effects. It is expected that GlobalFoundries and the suppliers that follow it will attract other businesses to the area and prompt local companies to expand.
That is where GlobalFoundries will really impact the PR industry, Messier said. It is the next ring.
For that ring, and the ripples after it, no technical expertise will be necessary.
It is easy to get blinded by something the size of a GlobalFoundries, but the real economic potential for this area will cover everything, D'Alessandro said. "The restaurants, the dry cleaners, the local Home Depot, the welding shops, the law firms, the accountants - and the PR and marketing firms."
Why the fuss?
Why is the GlobalFoundries chip fab such a big deal? And why does it matter-of all the industries-to the local public relations industry? For one, the chip fab is arguably the biggest economic development project in the history of upstate New York. The sheer size of GlobalFoundries means it will have spillover effects across several fields-from construction to law, from education to marketing. That's why people in the local PR industry are positioning themselves, and their clients, to be ready for the GlobalFoundries effect. So how big a project is this? Here are some figures:
$4.2 billion Cost of the project
$3.4 billion Cost of the high-tech tools and equipment that will be installed in the chip fab
$800 million Cost of construction itself
1.3 million Total square footage of the buildings now under construction
1,400 Number of employees GlobalFoundries will hire locally
$88 million Annual local GlobalFoundries payroll in 2014
$62,857 Average pay in 2014
