October 11, 2011

State Grabs Lead In Nanotech Field

By: Joseph Spector, Albany Bureau Chief

Source: Gannett News

Just days after last month's $4.8 billion mega-deal involving the state, IBM, Intel and other high-tech companies, the STC technology center in Canandaigua started receiving inquiries from firms interested in locating there.

And just days before the announcement, companies from the Hudson Valley toured the GlobalFoundries plant in Saratoga County in hopes of building partnerships with the new $4.6 billion computer chip factory.

The activity signals how New York has become a leader in the use of nanotechnology — the engineering of materials at the molecular level — for the research and development of advanced products.

The deal with IBM and Intel is expected to create 2,500 jobs across the Hudson Valley and west along the Thruway in Utica and Canandaigua, with the latter getting about 300 of the total.

What has created optimism among business groups is that the nanotechnology research, which in this case aims to develop faster and cheaper computer chips, may also spur the manufacturing of the chips in New York.

That's what has happened with research at the College of Nanoscale Science and Engineering at the University at Albany. It helped lead to the GlobalFoundries plant, which will employ 1,400 workers and was aided by $1 billion in state aid and tax breaks.

"What has been created in New York is truly spectacular," said Brian Toohey, president of the Semiconductor Industry Association, a trade group in Washington, D.C.

"Albany and New York in general is one of the most exciting places in the world for the semiconductor industry right now."

Paul Tolley, executive director of the STC Center in Canandaigua, said the state is building a technology infrastructure where companies "really need to come to New York if they want to play in these markets."

The Canandaigua center had struggled until it merged last year with the SUNY Albany nanotech center, which has blossomed into one of the world's leading research facilities with more than 250 companies and 2,500 employees. Now the Canandaigua center plans to focus on the commercialization of the research done in Albany.

The Canandaigua facility was one of five Centers of Excellence set up by then-Gov. George Pataki in 2004. State funding for the centers has dropped over the years, from $1.2 million two years ago to $872,000 in the current budget.

Tolley said the center's goal is private investment, which has grown to 80 percent of the center's revenue and includes 35 ongoing projects.

The center employs about 40 full-time staff members.

"Without a set vision or direction and without private money coming in, it was an unsustainable model to live on $1 million when you have a $50 million facility," Tolley said.

The center announced Thursday it is running a two-week training program at Finger Lakes Community College in January to train clean-room operators.

IBM, based in Armonk, Westchester County, is putting up $3.6 billion in the agreement with the state. It plans to expand its facilities and develop the computer chips to fuel new technology, including for laptops, cellphones and medical devices.

"There is going to be a lot of opportunity," said Michael Oates, president of the Hudson Valley Economic Development Corp., a privately funded agency in Orange County.

"I think we are going to see companies that want to partner up with GlobalFoundries, want to be with IBM throughout the valley — and it's a logical synergy. And we're kind of that bridge between the Capital Region and the money in New York City. There's going to be link between all three."

No public dollars will go to the private companies. About $400 million in state aid over five years will go to the SUNY Albany nanotech center to expand its facilities.

The agreement has drawn criticism from Sen. Greg Ball, R-Patterson, Putnam County.

Ball said there was a "cloud of secrecy in which the deal was made" and said the public should receive assurances that the companies will create the jobs and not move them overseas.

IBM has offices in his Hudson Valley district.

"I want to know who was at the table and what concessions were secured as New York decided to give $400 million to a group of companies that are known for offshoring jobs," Ball said.

Gov. Andrew Cuomo's office has insisted that no money is going to the companies.

Alain Kaloyeros, CEO of the nanotech center, said the job projections are real and based on the business plans put together by the companies and the state.

In the fast-moving world of technology, the research should be well under way within a year or two and lead to manufacturing hubs across the state, he predicted.