July 24, 2006

Chip Fab A Chance To Cash In

By: by Larry Rulison, Business Writer, Times Union


NORTH GREENBUSH -- Advanced Micro Devices Inc.'s plan to build a $3.2 billion computer chip manufacturing plant in Saratoga County isn't just about the 1,200 employees the factory will employ or the thousands of construction workers who will be assigned to the project.

Capital Region companies, many of which have been supporting the region's efforts to land a so-called chip fab for years, already are dreaming of the new business that could be generated by AMD's presence.

AMD has said it will spend at least an additional $2 billion at the plant at the Luther Forest Technology Campus during its first five years of operation. Most chip fabs require hundreds of suppliers and vendors, almost all of which would require at least a small presence within close proximity of the factory, which would produce advanced computer chips for personal computers as well as for complex business computers and servers.

That's good news for a company like Starfire Systems Inc. in Malta, which makes raw materials used by suppliers to the semiconductor industry. Andrew Skinner, Starfire's manager of sales development, said many of the company's customers are located in California and Japan. Starfire has about 30 employees at its headquarters in the Saratoga Technology & Energy Park, which is on a parcel of state-owned land within the Luther Forest site.

"We would really benefit from these other suppliers locating to the area," he said.

No other company with a local presence will likely benefit more from AMD than National Grid, the Capital Region's major electric utility.

National Grid has been intimately involved with the state's efforts to attract a chip fab because such a factory would end up needing about 100 megawatts of electric capacity, which is equal to the needs of 25,000 homes, said Linda Hill, a senior economic development specialist with the utility.

And the power has to be extremely reliable: A chip fab cannot be without power for more than 100 milliseconds, on average, she said.

Hill has been involved with New York's efforts to attract a chip fab to the region for years. National Grid has spent $1 million in marketing the state to the semiconductor industry in partnership with groups like the Center for Economic Growth, an Albany-based economic development group, and Albany NanoTech, the University at Albany's $3 billion nanotechnology research and development center that is studying how to make computer chips smaller and faster.

The utility also has given Saratoga Economic Development Corp., the developer of Luther Forest, nearly $750,000 for site preparation, including engineering, aerial mapping, and environmental and vibration studies.

"We want to invest in companies that are going to provide jobs," Hill said. "You go after those. It's not just about power, it's about all the other things that go along with that."

Hill said AMD would require a new substation that would be built within Luther Forest, as well as four new transmission lines that would have to be built to the property. AMD would cover some or all of the cost, which is typical for a large new customer.

Applied NanoWorks Inc. in Watervliet, which is developing ultra-fine abrasive "slurries" used in the polishing of semiconductor materials, also stands to benefit from AMD. Chief executive Eric Burnett says the AMD announcement is a "great opportunity" for the region's semiconductor and nanotechnology companies, and it will give local firms a chance to become part of AMD's supply chain.

"Proximity is a nice additional benefit if it works out that way," Burnett said.

Even a company not directly involved in semiconductor manufacturing stands to reap large rewards from the AMD deal. Zone 5, a marketing and communications firm based in Albany, was one of the main organizers of NY Loves Nanotech, a group of economic development and technology companies that has worked to bring semiconductor companies to the state.

The group was a major exhibitor last week at Semicon West in San Francisco, the largest semiconductor conference in North America, and also exhibits at other conferences around the world.

Zone 5, which works for NY Loves Nanotech and many of the economic development groups and companies associated with it, created the NY Loves Nanotech exhibition booth and marketing materials. In addition, Zone 5 has been a sponsor of the group and also has donated money and time to the effort for years.

All that has been paying off. Zone 5, which has 28 employees and has many local technology companies as clients, was hired to do work for Semiconductor Engineering and Materials International, or SEMI, which is the San Jose, Calif.-based trade group that organizes Semicon West.

Todd Mosher, Zone 5's president, said the AMD deal lends credibility to companies in the Capital Region and other parts of New York looking to get into the semiconductor business.

"We really do have to offer what we've been touting all these years," he said.

Group effort

These companies -- ranging from tech firms to builders and developers -- have been involved with the NY Loves Nanotech effort to bring a chip fab to New York. Many expect to benefit when Advanced Micro Devices builds its fab in Saratoga County:

Albany Valve & Fitting Co., Schenectady

Applied NanoWorks, Watervliet

BBL Development Group, Albany

Capovani Brothers, Scotia

CB Richard Ellis, Albany

CVD Equipment Corp., Ronkonkoma

Endicott Interconnect Technologies, Endicott

Fala Technologies, Kingston

Ferro Electronic Material Systems, Penn Yan

Heslin Rothenberg Farley & Mesiti, Albany

HSBC, New York City

Materials and Technologies Corp., Poughkeepsie

National Grid, Albany

PrecisionFlow Technologies, Saugerties

Solid State Colling Systems, Pleasant Valley

Starfire Systems, Malta