Sign Up For enews letters

Home > Articles By Issue > Site Selector's Strategies > Article December 2006

The 2006 Business Facilities Economic Development Deal of the Year (EDDY) Awards

Our EDDY awards for 2006 recognize the biggest and most high-impact expansions and relocations of the year.

By Karim Khan

The EDDY program for 2006 was open to entries worldwide for projects announced or completed on or after July 1, 2005 that have not been entered in the EDDY competition before. Our five judges scored each project on a scale of 0-100 based on the total economic impact and hurdles overcome to make the project a reality. For more details on the entry and scoring methodology, please contact the editors at feedback@groupc.com.

G O L D   W I N N E R

In June, Dr. Hector Ruiz (left), Chairman & CEO of Advanced Micro Devices (AMD), was welcomed by New York State Governor George E. Pataki at the announcement of the new AMD facility in Malta, NY. Photo by Empire State Development

$5.2 Billion AMD Project in New York Takes EDDY Gold for 2006

New York State’s Centers of Excellence program was key in convincing AMD to stake so much here.

Project Title: Advanced Micro Devices 300mm Semiconductor Manufacturing Plant

Entered by: Empire State Development

“This project is an important symbol of economic transformation in a region where traditional manufacturing industries have declined; it enhances the state’s image in the world.” —EDDY judge Jerry Szatan, Principal, Szatan & Associates

When we counted the final scores, it was a narrow margin separating the top EDDY winners from the rest of the pack. Still, it would be rightfully difficult for anyone to begrudge New York State, its economic development agency Empire State Development, and Advanced Micro Devices (AMD) this Gold—this is a huge project, both in terms of investment and impact upon the Capital region of upstate New York.

Attracting AMD to the Luther Forest Technology Campus in Malta, NY (located about 175 miles north of New York City and 25 miles north of Albany, the state capital) was no easy feat. Unlike most competitive economic development projects, this wasn’t a case of neighboring counties or states competing with each other—AMD was seriously considering building this next-generation facility in Dresden, Germany, where it already has a major plant. Dresden, the German state of Saxony, and the German federal government worked together to create an attractive package for AMD to grow there.

Architect’s rendering of the AMD 300mm semiconductor fabrication facility to be built at the Luther Forest Technology Campus. Photo by M+W Zander

Among the incentives New York offered to AMD are a $500 million capital grant to defray the cost of its facility and equipment; a $150 million research and development grant to develop new microprocessor technologies for use specifically in the Luther Forest AMD facility (in collaboration with IBM in East Fishkill, NY and the Center of Excellence in Nanoelectronics at the University at Albany, part of the SUNY system); and special Empire Zone tax status.

More Than Incentives

To say that AMD chose Upstate New York for what it and Empire State Development call “the most advanced semiconductor manufacturing facility in the world” based on financial incentives alone would be misleading, however. A number of other important pre-existing relationships and preparatory work by the state put it in position to win AMD’s project—incidentally the first 300mm plant to be built at a brand-new campus in the U.S. (300mm refers to the size of the wafer on which the chips are manufactured; older plants used smaller sizes with correspondingly lower manufacturing output.) There are 13 other 300mm plants in the U.S., including three already in New York; the U.S. represents only 20% of the world’s 300mm plants.

Critical to AMD’s decision to site the fab at the Luther Forest Tech Campus is its proximity to The College of Nanoscale Science and Engineering of the University at Albany. CNSE is the first college in the world devoted exclusively to the research, development, and deployment of innovative nanoscience, nanoengineering, nanobioscience, and nanoeconomics concepts. CNSE’s Albany NanoTech complex—a $3 billion, 450,000-square-foot facility that has attracted over 250 global corporate partners—is the most advanced research complex of its kind at any university in the world. Photo by U Albany-CNSE

The conditions helping New York’s candidacy included its Centers of Excellence program; each of the five centers partners with state universities, government, and the private sector to specialize in a high-tech field. The center in Albany, which focuses on nanotechnology, had a pre-existing plan to become the only university-based 300mm semiconductor pilot prototyping facility in the world.

“There were two elements about this deal that impressed me the most, aside from the huge job creation and major impact on the regions economy,” says EDDY judge Frank Mancini, Jr., board member at the International Economic Development Council (IEDC) and managing member of Harborage, LLC. “First is the number of state and local economic development organizations that pooled their resources to make the deal happen. Second is how refreshing it is to have a company like AMD agree to undertake the construction of a high-tech manufacturing facility in the USA and create more than 1,200 job opportunities here and not at an overseas location.”

Indeed, many Asian locations offer lower costs in some regards, but New York made up for it by having a shovel-ready site, a Center of Excellence, and a workforce already accustomed to working for area companies like IBM, ASML, Tokyo electron, Applied Materials, Planar Semiconductor, and Philips Semiconductors. Speed to market was critical for AMD, and New York committed to meeting a tight schedule, including completion of a 28-mile water pipeline from the Hudson River.

The 1.2 million-square-foot AMD plant will cost about $600 million, and will house approximately $2.6 billion in state-of-the-art tools. Expenditures over the first five years will total $5.2 billion, meaning New York will get an excellent return on its incentives. More than 1,200 jobs will be created by AMD, with another 1,209 estimated to be created indirectly (suppliers, etc.), and a further 1,791 estimated to be created as “induced” jobs (for example, positions created by a car dealer to accommodate newly enriched/employed AMD workers’ greater spending power). Collective personal income in the state will shoot up by $220 million over the foreseeable life of the facility. The state figures on 6,000 jobs being created just for construction of the facility, which is scheduled to open in 2012 or 2013, depending on a number of factors.

The partners who share in this prize, besides Empire State Development and AMD, include the Governor’s Office, State Senate, the New York Departments of Labor and Transportation, the state police, the University at Albany’s Center for Advanced Technology in Nanomaterials, the International Alliance of Nanotechnology Regions, the Saratoga County Economic Development Corp. as well as its Sewer District and Water Authority, the Luther Forest Technology Campus Development Corp., National Grid, the towns of Malta and Stillwater, Creighton Manning Engineering, CT Male Associates PC, LA Group Architects, and M+W Zander.

 

» See the additional EDDY awards winners.

Looking for information on locations, click here