NY's Innovative Investment Package
In June 2006, a year after the New York team first visited Austin, both New York and AMD issued their first commitment to the project. AMD announced the results of its site selection process, and the Luther Forest Technology Campus was named as the best global location for its potential capacity expansion. New York agreed to commit to a $1.2 billion incentive package, and AMD signed a letter of intent confirming that it would build in New York if it indeed went ahead with a new fab.
The incentive package that New York offered was unique in one very important way - it built in the time and flexibility that AMD needed to work out the details of its expansion. From the time the letter of intent was signed, AMD had a two-year period in which it could exercise the incentive package option.
Says Travis Bullard, GLOBALFOUNDRIES Public Affairs and Communications Manager, and a member of the original AMD site selection team, "There is so much investment that goes into bringing one of these facilities on line; New York's willingness to engineer flexibility into its benefit package gave AMD the time it needed to move forward."
In this instance, the details were more important than anyone originally imagined. In the end, AMD made the strategic decision to spin off its manufacturing assets to a new company, GLOBALFOUNDRIES, which will own and operate Fab 8.*
There has been much talk about the magnitude of the incentive package that New York offered to AMD. Indeed, this incentive is the largest private economic development project in the state's history. The simple fact is that this innovative investment brought the cost of building and manufacturing in New York in line with other regions of the world. Says Brobston, "If regions are serious about reversing the flow of high-tech jobs to other countries, then their incentives must create a level playing field for global companies. New York's incentive was a strategic investment designed to lure an economic driver that would spur significant job growth and solidify our state's position as a premier global technology hub."
The site selection process is now complete and GLOBALFOUNDRIES' Fab 8, a 1.3 million-square-foot manufacturing facility, is on schedule to begin production in 2012. For AMD/GLOBALFOUNDRIES, two key factors set New York apart from the rest: the state's clear strategic vision and community preparedness.
Says Bullard, "When you look at why this process was successful, I think the answer is that [the state] knew exactly what it wanted. New York State and this area [Saratoga County] in particular determined that they wanted to bring a semiconductor chip fab here. What you are seeing here today is the result of New York setting a goal and identifying the resources needed to be in place to make the decision for AMD so much easier."
Will New York's investment pay off? New York's leaders believe that the presence of GLOBALFOUNDRIES in Saratoga County - along with the many other regional assets like IBM, GE, SEMATECH, CNSE, and other research leaders - will cement the region's position as a premier global nanotech center. The industry seems to have taken notice, and the industry (including SEMATECH and MW+ US Group) has begun to move its operations to New York. SEDC continues to work with companies in the nanotech, biotech, and cleantech industries to fill the remaining two million square feet of developable space at the Luther Forest Technology Campus. Without a doubt, the GLOBALFOUNDRIES project will positively impact the New York economy for years to come.