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Intel, IBM to lead $4.4B chip R&D hub in NY
Dylan McGrath
9/27/2011 1:22 PM EDT
SAN FRANCISCO—A group of semiconductor companies led by Intel Corp. and IBM Corp. will invest $4.4 billion over five years to create a semiconductor research and development hub in New York to develop next-generation chip technology, New York Governor Andrew M. Cuomo said Tuesday (Sept. 27).
The investment is centered around two projects, one led by IBM and its partners that will focus on building the next two generations of semiconductors, and another led by Intel that will focus on developing process technology for 450-mm wafers, dubbed the Global 450 Consortium, according to the statement issued by Cuomo's office.
Intel (Santa Clara, Calif.) is joined in the 450-mm development effort by IBM, Taiwan Semiconductor Manufacturing Co., Gloabalfoundries Inc. and Samsung Electronics Co. Ltd., according to the statement. Intel separately agreed to establish its 450-mm East Coast headquarters to support the overall project management in New York's capitol, Albany, according to the statement.
A spokesman for IBM said IBM and its partners in the Common Platform process technology alliance, Samsung and Globalfoundries, would focus research on developing 22- and 14-nm chips. Further details of the development work will emerge at a later date, the spokesperson said. Of the $4.4 billion in total investment in the two R&D projects, $3.6 billion will come from IBM, said the spokesperson. According to Cuomo's statement, this new commitment by IBM brings its total investment in chip technology in New York to more than $10 billion in the past decade.
No private company will receive any state funds as part of the agreement, according to the statement from Cuomo. It is unclear if the companies involved will receive tax breaks or other incentives to locate the projects in New York. To support the project, New York will invest $400 million over five year in the SUNY College for Nanoscale and Science Engineering (CNSE) in Albany, including $100 million for energy efficiency and low cost energy allowances, according to Cuomo's office.
New York secured the investments in competition with countries in Europe, Asia and the Middle East, according to Cuomo's statement.
According to Cuomo's office, the two R&D programs will create about 4,400 jobs and result in the retention of another 2,500 existing jobs in upstate New York. The roughly 4,400 jobs that will be created include about 2,500 high-tech jobs at CNSE Albany NanoTech Complex, IBM., SUNY Institute of Technology in Utica and CNSE's Smart System Technology & Commercialization Center in Canandaigua, according to the statement.
"This unprecedented private investment in New York's economy will create thousands of jobs and make the state the epicenter for the next generation of computer chip technology," Gov. Cuomo said.
Some chip makers, including those involved in the Global 450 Consortium, are at the early stages of developing process technology to migrate from building chips on 300-mm silicon wafers to 450-mm wafers, which will allow them to produce more than twice as many chips per wafer. Equipment vendors initially resisted the migration to a new wafer size, but have gradually come on board and begun creating early-stage production tools.
Intel President and CEO Paul Otellini said in the statement released by Cuomo's office that the Global 450 Consortium is a critical element for moving the chip industry to the next-generation wafer size.
"This new technology will reduce the cost of production, increase productivity for manufacturers and reduce our environmental footprint on a per chip basis," Otellini said.
The investment is centered around two projects, one led by IBM and its partners that will focus on building the next two generations of semiconductors, and another led by Intel that will focus on developing process technology for 450-mm wafers, dubbed the Global 450 Consortium, according to the statement issued by Cuomo's office.
Intel (Santa Clara, Calif.) is joined in the 450-mm development effort by IBM, Taiwan Semiconductor Manufacturing Co., Gloabalfoundries Inc. and Samsung Electronics Co. Ltd., according to the statement. Intel separately agreed to establish its 450-mm East Coast headquarters to support the overall project management in New York's capitol, Albany, according to the statement.
A spokesman for IBM said IBM and its partners in the Common Platform process technology alliance, Samsung and Globalfoundries, would focus research on developing 22- and 14-nm chips. Further details of the development work will emerge at a later date, the spokesperson said. Of the $4.4 billion in total investment in the two R&D projects, $3.6 billion will come from IBM, said the spokesperson. According to Cuomo's statement, this new commitment by IBM brings its total investment in chip technology in New York to more than $10 billion in the past decade.
No private company will receive any state funds as part of the agreement, according to the statement from Cuomo. It is unclear if the companies involved will receive tax breaks or other incentives to locate the projects in New York. To support the project, New York will invest $400 million over five year in the SUNY College for Nanoscale and Science Engineering (CNSE) in Albany, including $100 million for energy efficiency and low cost energy allowances, according to Cuomo's office.
New York secured the investments in competition with countries in Europe, Asia and the Middle East, according to Cuomo's statement.
According to Cuomo's office, the two R&D programs will create about 4,400 jobs and result in the retention of another 2,500 existing jobs in upstate New York. The roughly 4,400 jobs that will be created include about 2,500 high-tech jobs at CNSE Albany NanoTech Complex, IBM., SUNY Institute of Technology in Utica and CNSE's Smart System Technology & Commercialization Center in Canandaigua, according to the statement.
"This unprecedented private investment in New York's economy will create thousands of jobs and make the state the epicenter for the next generation of computer chip technology," Gov. Cuomo said.
Some chip makers, including those involved in the Global 450 Consortium, are at the early stages of developing process technology to migrate from building chips on 300-mm silicon wafers to 450-mm wafers, which will allow them to produce more than twice as many chips per wafer. Equipment vendors initially resisted the migration to a new wafer size, but have gradually come on board and begun creating early-stage production tools.
Intel President and CEO Paul Otellini said in the statement released by Cuomo's office that the Global 450 Consortium is a critical element for moving the chip industry to the next-generation wafer size.
"This new technology will reduce the cost of production, increase productivity for manufacturers and reduce our environmental footprint on a per chip basis," Otellini said.
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GoGoGeek
9/27/2011 1:43 PM EDT
New York rocks!
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larkforsure
9/27/2011 2:33 PM EDT
[ SOS ] Complaint with IBM China CSR on Centennial
[ Review ] How Much IBM Can Get Away with is the Responsibility of the Media
http://wp.me/p1hDC3-aL
IBM Advised to Treat its People with Humanism in China
http://wp.me/p1hDC3-aW
Tragedy of Labor Rights Repression in IBM China
http://wp.me/p1hDC3-92
Scandal stricken IBM detained mother of ex-employee on the day of centennial
http://wp.me/p1hDC3-8I
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SudsSutherland
9/27/2011 3:57 PM EDT
Dylan,
Let's not kid ourselves......only NY ("Tech Valley ") or IMEC could have pulled off this project.....China and Abu Dhabi mere pretenders. Hats of to the NY politicos and Econ Dev folks for putting Tech Valley in a position to compete with Silicon Valley !
Having survived the initial 300mm false start this should be fun to watch
Best Regards, Loren
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GroovyGeek
9/27/2011 11:51 PM EDT
NY/Albany is the very definition of a "pretender". IMEC is head and shoulders above in every respect, not that IMEC itself is that brilliant.
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dylan.mcgrath
9/28/2011 1:55 PM EDT
Thanks for your comment Loren. I'm sure you are right.
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mrpetkus
9/27/2011 4:06 PM EDT
Great news for NY!
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Code Monkey
9/27/2011 4:30 PM EDT
This was a long time coming. Congrats to NY for their long-term focus. Upstate NY is quite beautiful in the summer and the cost of living is a lot lower than Silicon Valley.
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Jay.Kirsch
9/27/2011 5:01 PM EDT
Congratulations New York State! You can change your slogan from the "Silicon Valley of the 1960's" now that semiconductor growth is making up for the lost defense work from the Cold War.
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hm
9/27/2011 5:40 PM EDT
Felicitations NY! Can this project be expedite to boost EE industry outlook?
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larkforsure
9/27/2011 11:19 PM EDT
[ SOS ] Complaint with IBM China CSR on Centennial
[ Review ] How Much IBM Can Get Away with is the Responsibility of the Media
http://wp.me/p1hDC3-aL
IBM Advised to Treat its People with Humanism in China
http://wp.me/p1hDC3-aW
Tragedy of Labor Rights Repression in IBM China
http://wp.me/p1hDC3-92
Scandal stricken IBM detained mother of ex-employee on the day of centennial
http://wp.me/p1hDC3-8I
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ReneCardenas
9/30/2011 2:43 PM EDT
Give the name of any corporate citizen that is free of wrong doing, and let that corporation throw the first stone.
I read these concerns, but if one is to object about IBM, we would have to object of all.
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mescusag
9/27/2011 11:30 PM EDT
Non recurring production cost would most likely would go down
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RobDinsmore
9/27/2011 11:55 PM EDT
Crap, I mean great. Looks like I may have to consider moving to upstate NY.
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Dave.Dykstra
9/28/2011 12:06 AM EDT
Well, this looks like good news for NY, and the industry in general. I wonder how many they will be able to recruit locally and how many will have to come from elsewhere....
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KB3001
9/29/2011 8:21 AM EDT
Either way, it's great news for the region.
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tato76
9/28/2011 5:33 AM EDT
This is great for NY State. Too bad for unemployed engineers who are looking for a place to live with a good cultural offering with a lot of things to do. Winter in Upstate NY is rather depressing. I've lived in Rochester for 7 years and wasn't very fond of it. I also spent a winter in Binghamton which is even worse. But still this is a bit win for the NYS economy. Kind of wish this would happen in Portugal where I live now! :)
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resistion
9/28/2011 5:40 AM EDT
I felt NY upstate did not have the cultural diversity of West Coast or NYC. For this kind of job, it is not attractive.
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BLinder
9/28/2011 9:23 AM EDT
Simple solution, you recruit in the spring and summer months, get the employee to move, ensure they sell their home and buy in NY, don't mention NY high taxes, or liberal state, then get them working before the first snow blizzard hits. On the flip side even Global Foundry has problems filling jobs in the region.
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KB3001
9/29/2011 8:24 AM EDT
A free and regular shuttle service to NYC would do it!
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kevinICdesigner
9/28/2011 9:44 AM EDT
Is this why INTC is borrowing $5e+9?
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Himanshu_Gupta
9/28/2011 11:26 AM EDT
some good news in the gloomy environment. Finally industry is moving towards 450mm fabs to keep cost at lower nodes in check. As expected, only companies with deep pockets are part of the consortium.
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Bob Lacovara
9/28/2011 11:57 AM EDT
One has to wonder how IBM and Intel picked NY. I mean, despite the fact of a "competition". (It doesn't matter how an electorate votes: what matters is who counts the votes.) Well, of course IBM would have a bias for NY, but I wonder if the state sweetened the deal on the taxes front. NY has not exactly been the "go to" state for business lately. If I were going to sink almost $5B in a business, I'd start out in some right-to-work state with a decent record on the business side of things.
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pinhead
9/28/2011 12:40 PM EDT
NYS is very business friendly. Especially if you're IBM.
And you can't hire any guy off the street to run your fab, so you're going to be paying them a reasonable wage, anyhow. So right-to-work doesn't equate to much in cost savings for this case. Plus, right-to-work states generally suck, you need to attract some good engineers - and most of us prefer the coastal states.
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Bob Lacovara
9/28/2011 1:34 PM EDT
I'll take your word on it that NY is business-friendly: I don't have any information one way or the other. Being IBM in NY doesn't hurt any, and indeed they have impressive facilities there. Another good point you make is that the fab workers are not bolt-twisters. But as far as right-to-work states go, that would include both Texas and Virginia. Neither are dumps by any means: quite the contrary. Both have state surpluses, and Texas doesn't have a state income tax. If you haven't seen the Blue Ridge Mountains, you have missed something, but that can be easily remedied. And last I checked, Virginia has a coast. (Who is "us", anyway?) As an aside, a car ride down the Skyline Drive, followed by the Blue Ridge Parkway will reward you with vistas of heart-rending beauty.
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pinhead
9/28/2011 5:05 PM EDT
You're right - what I've seen of Virginia has been really nice - I used to go cycling on the blue ridge somewhat regularly when I was a grad student. I'd stand by my assessment of Texas, though ;-) A good business and fiscal climate doesn't compensate for the real, uh, climate - at least in my mind.
By the way, NY has actually attracted at least one business OUT of TX - Sematech relocated to Albany a year or so ago.
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Bob Lacovara
9/29/2011 8:41 AM EDT
Well, honesty requires that I admit that northern VA is rather overcrowded, but yes, the Blue Ridge is magnificent. You also hit on one of Tx's Achilles' heels: its weather. I lived near Houston 14 years, and the weather was, um, rough. There are other reasons, though that I like both Va and Tx, but they are related to gun ownership policies and other matters that aren't germane here.
Overall, though, this development in NY is a net asset to the state, and by "the state" I mean the people of the state. There will be decent jobs, and the support businesses that go with the decent jobs. That some wheeling-dealing went on is certain, but at least NY didn't sink $500M into smoke and solar mirrors: IBM and Intel are hardly fly-by-night.
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ihaller
9/28/2011 3:06 PM EDT
Bob: You'll be surprised how many inventive engineers (and scientists, machinists, etc) would reject a job offer if it was tied to ideology. I, for one worked for IBM (1961 - 1993 and happily after elsewhere to age 73), and never missed the absence of unions, but together with the vast majority of my colleages greatly appreciated that management did not try spoonfeeding of anti-union propaganda. So let's just wish Intel, IBM, Samsung and other members of the consortium success with their new facility.
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Bob Lacovara
9/28/2011 3:33 PM EDT
ihaller, no, not really. It would strike me as more than strange if a company trotted out the political leanings of the people who ran the place, at least in an engineering firm, when interviewing or hiring. My response to this thread was simply that I didn't think NY was any company's first choice of a home for a large investment, unless, like IBM, they already had a very large investment in place. I then listed the first criteria that came to mind, which included that the state be right-to-work, which strikes me as close to a basic right for the worker, as well as eliminating union issues for the company. (Look at what Boeing is going through with an expansion plant in South Carolina.) Three other posters list objections to NY: resistion mentions a lack of "cultural diversity", a chimera to my mind; MLinder mentions taxes, a real enough factor; and pinhead makes a sweeping generalization about right-to-work states that seems hardly fair. For that matter, NY may have tough winters, but the state has some beautiful landscape as well. In the end, though, no single factor will guide someone to move to a new job. The person will weigh up the pros and cons against their particular priority list, and made a decision. I suspect that scenery (or right-to-work, for that matter) are anyone's highest priority.
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kevinICdesigner
9/28/2011 12:24 PM EDT
Intel knows what its got already. This gives them some access to IBM tech, which is probably a big net gain for INTC. The center of IBM tech dev is in upstate NY. Hence INTCs intent to go there. If it was in SiVly then IBM might get more out of it. Other sites are irrelevant.
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gutiea
9/28/2011 1:55 PM EDT
Actually the $4.4 billion, includes an upgrade that IBM would have had to do anyway to remain competitive at 22 nm. The newly committed resources from all parties, I speculate, is on the order or $400M in subsidies and $400M in investment from the parties of the Global 450mm Alliance. NY has succeeded because has committed massive subsidies for Buildings, Tools and assistance to corporations.
The grand total for subsidies now approaches or exceeds $4.5 billion in 10 years in three fronts: IBM (~$1.5 billion), Globalfoundries (~1.5 billion) and SUNY CNSE (~$1.5).
Development costs have been matched at 50% through SUNY CNSE; the CNSE facility, before the new funding (~$1 billion) had deployed until 2011 about $7.5 billion in 10 years.
It has been a very determined effort to save/create jobs, regain relevance, save IBM Semis and use the university to funnel funds to an industrial development consortium.
It has worked, except for the fact that without periodic injections of job saving and job creating subsidies every 2 years; it could not fly on its own.
Now that Intel seems to be on-board for 450 mm, and with TSMC and Samsung joining; there is the hope that someday this industry will be self-sustaining again in NYS.
The evolution of the process is a really interesting story of political games, strategic decision, intrapreneurship, university role redefinition and unwavering commitment of public funds.
The process of NY semiconductor re-industralization seems to be working and to be beyond minimum sustaining critical mass.
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Joel B
9/30/2011 3:07 PM EDT
Interesting that SEMATECH, who relocated to Albany, who started the 450 mm initiative, is absent from this release. Do they no longer have a role?
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ReneCardenas
9/30/2011 3:50 PM EDT
Great news, just if these kind deals can be struck with many other corporations through out the continental USA, maybe then the economy would really turn in to more positive territory.
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Bob Lacovara
9/30/2011 4:20 PM EDT
In fact, it is good news on more than one front: the jobs and rise in the economy, of course. (On
Wall Street, one saying is "a rising tide floats all boats".) The other is that it would be an increasingly rare example of the government doing what it should do: grease the skids, that is, enable companies to do business that might otherwise be uneconomic due to initial conditions. Government doesn't create jobs (other than civil service): Intel and IBM will do the creating. Government does the jump start and then gets out of the way. I hope...
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jbrown96
10/2/2011 4:12 PM EDT
Bad news for tech, politics, and culture and the civil society. NY state has gone beyond the point of moral decency and continues to fall into the leftist abyss. This doesn't pass the 'smell' test... Cronyism between Ortinelli and Cuomo? Anti Christian agenda? I call for boycott on INTC and IBM. http://patriotupdate.com/12822/ny-panel-wants-taxpayers-to-foot-bill-for-sex-change
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Baolt
10/3/2011 8:44 AM EDT
Well, new silicon valley at east cost? Especially in a city where trillions of problems to face daily. i really wonder how these companies will be able to find workers. Why silicon valley at CA worked out cause of brilliant universities located around and genius people who was eager to move there. With NY despite tax breaks, state incentives, its quite blur how it would work out, and who would like to move there?
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elPresidente
10/3/2011 11:29 AM EDT
You really are clueless. There's nothing "new" about the location - IBM's fab has been around for DECADES and is not in New York CITY as you seem to think. It's in a very beautiful hilly part of the state. Also, look up "Cornell University" and "Columbia University" before you diss the education levels there.
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Nic_Mokhoff
10/4/2011 1:55 PM EDT
elPresidente: Glad you set the record straight. NYS has had a welcoming committee to invest in update New York around the Albany SUNY campus for a long time. Many companies have done nano research on the campus and its nanotech center. What's new is Intel's participation in the 450-mm wafer project with partners. Even Intel is lost in getting the needed yields out of pizza-pie sized wafers and needs help from others.
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Deepak Sekar
10/3/2011 12:56 PM EDT
Hi folks, I wrote a blog post on this subject recently... below are details:
Title: Can 450mm decommoditize the semiconductor industry?
Abstract: Is the transition from 300mm to 450mm wafers just driven by 20-30% cost reduction? Or is there more to it than meets the eye? Let's take a look...
Link: http://www.monolithic3d.com/2/post/2011/10/can-450mm-decommoditize-the-semiconductor-industry.html
Check it out if you get a chance... and let me know what you think.
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Nic_Mokhoff
10/4/2011 2:10 PM EDT
Deepak Sekar: Interesting analysis and thanks for this plug: "Like many semiconductor enthusiasts, my day begins with a look at EETimes."
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Nic_Mokhoff
10/4/2011 2:12 PM EDT
And try this one on for size: http://www.ebnonline.com/author.asp?section_id=1068&doc_id=234095
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