August 08, 2011

Moving On Up(State)

By: by Larry Rulison, Business Writer


  The story behind M+W Group moving its U.S. headquarters from Plano, Texas, to Watervliet Arsenal is not about the Capital Region beating out the Dallas-Fort Worth metroplex to lure a single coveted company to the region.
M+W chose upstate New York over other high-tech hotbeds because the semiconductor industry is booming here more than anywhere else in the country.

"It's where our business is," said Rick Whitney, chief executive officer of M+W U.S., the general contractor for the $4.6 billion computer chip factory that GlobalFoundries is building in Saratoga County. "When we looked at who our clients are, we're seeing more and more of them being located in the Capital Region. This is the one place in the country where we can be side by side with our biggest clients on a daily basis."

That includes not only GlobalFoundries, but also the University at Albany's College of Nanoscale Science and Engineering, General Electric Co., IBM and Sematech, according to a list of the company's top customers. All have a major presence in this region -- and several of them could be planning additional manufacturing projects here over the next several years, including a second factory for GlobalFoundries. GE, which has its renewable energy headquarters in Schenectady, is also in the process of planning the largest solar factory in U.S. history.

M+W is a major player when it comes to building sophisticated manufacturing clean rooms and labs for the electronics and biotech industries as well as top state and federal research institutions.

M+W has had a presence in the Capital Region for nearly 10 years. And now the company is on the verge of completing construction of its new U.S. headquarters at Watervliet Arsenal, a military installation in the city of Watervliet where the U.S. Army makes cannon and other weapon and equipment components.

M+W's history at the arsenal dates to 2004, when the company worked with state officials to establish the Center for Construction Trades Training, a $6 million program to train workers to build semiconductor plants. Many of the laborers working on the GlobalFoundries project at Luther Forest Technology Campus in Malta completed the training program, which received millions of dollars in state funding obtained by Assembly Speaker Sheldon Silver.

Along with its design of the Albany NanoTech complex, one would think that M+W's selection to build the GlobalFoundries fab -- and the move to the arsenal -- was part of a grand design.

But Whitney says it was more about a leap of faith the company took, based on watching the state invest hundreds of millions of dollars in semiconductor manufacturing research in partnership with IBM, which has computer chip manufacturing operations in East Fishkill, less than two hours down the Thruway. The strategy bore fruit with the 2006 decision by GlobalFoundries to build its facility, which will likely grow to a $7 billion fab that will begin production next year.

"We saw the vision and the commitment by New York state," Whitney said. "We decided that this was a hot spot and we needed to be here. It just made sense."

That decision led Whitney to agree last year with state officials to move M+W U.S. from Plano, outside Dallas -- home to semiconductor giant Texas Instruments -- to the arsenal. M+W has promised to invest $225 million in its local operations over the next five years and to bring 190 jobs to Watervliet. The deal was once again struck with Silver, the Assembly speaker, along with Assembly Majority Leader Ron Canestrari and Alain Kaloyeros, chief executive officer of the NanoCollege.

The move is nearly complete, as well as the renovation of 40,000 square feet of space in Building 125, a structure at the arsenal built in 1918 where the Army made cannon parts until 2003. The building, among others, has been developed by a nonprofit group called the Arsenal Business & Technology Partnership that the Army pays to fill unused space at the arsenal.

The partnership has been able to attract dozens of companies to the arsenal, including Vistec Lithography, a British semiconductor tool manufacturer that relocated its operations to Building 125 in 2008. But M+W is by far the biggest company with the broadest focus to move to the arsenal.

"It gives us a tremendous amount of credibility," says Peter Gannon, the partnership's president. "It's opened the door for companies from all sectors."

Kaloyeros, who is a member of the partnership's board, says another major benefit of M+W's relocation here is the fact that the company is part of the $100 billion service sector for the semiconductor industry. That provides a signal to the rest of the semiconductor industry that this is a place to be.

"It has certain psyche factor to it," Kaloyeros said. "This type of PR, you can't buy with money."