Sunday, December 21, 2008

Clues to a fab future

It's in vogue to compare Albany to places like Austin, Texas, or Portland, Ore., when predicting what impact the multibillion-dollar computer chip factory planned for Saratoga County will have on the Capital Region.

But within a few hours' drive of Malta, where Advanced Micro Devices Inc. will build the $4.6 billion plant dubbed Fab 4X, are chip-production factories operated by IBM Corp. that provide at least a glimpse into what this area might expect in terms of economic growth from semiconductor manufacturing.

A state-of-the-art IBM chip fab similar to the one being planned by AMD is located in East Fishkill, in Dutchess County. A second one, older and less advanced, is in Essex Junction, Vt., a small community located outside Burlington.

Both communities have had controlled and measured economic growth.

By contrast, Austin experienced explosive growth in the 1980s and early 1990s as more than a dozen fabs were built. Greater Austin's population essentially tripled because of the tech boom.

Then there are communities like Hillsboro, Ore., outside Portland, and Chandler, Ariz., outside Phoenix, where Intel Corp. — AMD's main rival — has put multiple chip fabs. Both cities have seen substantial growth, although not of the caliber that occurred in Austin.

For now, though, it may be more realistic to look at East Fishkill and Burlington as models for the Capital Region to consider.

AMD, which is spinning off its existing manufacturing plants in Germany to a joint venture with the Emirate of Abu Dhabi, has committed to building just one fab at Luther Forest Technology Campus in Malta, although it has space at the site for up to three.

In fact, AMD has said that the joint venture, temporarily called The Foundry Co., would consider future fabs not only in New York but also in Abu Dhabi.

"We don't know yet," AMD spokesman Travis Bullard said of adding a second or third factory at Luther Forest. "Future fabs beyond Fab 4X will be determined by market conditions and business needs, so it's too early to predict."

With that in mind, the Times Union visited IBM's fab in East Fishkill and interviewed economic development and government officials who live near that plant and the one in Vermont to see what impact those facilities have had on their regions.

IBM's fab in East Fishkill, which opened in 2002 and includes 728,000 square feet of clean-room space and a 74,000-square-foot annex completed in 2006, sits on an 885-acre campus off Interstate 84.

A total of 6,000 people are employed at the campus, which has 46 buildings and opened in 1963. In addition to a chip fab, the site also has a computer chip packaging center.

The manufacturing tools at the East Fishkill fab are designed to imprint chips on 300-millimeter silicon wafers, which is the leading edge in chip manufacturing.

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