ALBANY, N.Y. (AP) -- New York will help subsidize an upstate semiconductor factory planned by a global consortium that includes Advanced Micro Devices Inc. and an oil-rich Persian Gulf emirate, Gov. David Paterson announced Tuesday.
Despite the state's fiscal crisis, Paterson said the $1.2 billion subsidy for the AMD spinoff Foundry Co. is a sound investment. He said the project will employ nearly 1,500 people -- and generate another 1,600 construction jobs -- while making New York less dependent on volatile revenue from Wall Street, which has dropped sharply this year and is a major reason for the state's current deficits.
New York has a $1.2 billion deficit now and an estimated $8 billion deficit for 2009-10, prompting cuts in spending that Paterson said could eventually hit school aid and the public workforce. The state's annual budget is more than $120 billion.
"This is exactly the conversion the state needs to make, rather than relying on the economy of an entity for which we have no control," Paterson said. He said the state's increasing reliance on taxes from the financial sector -- a fifth of all state revenue -- was like "children in college relying on our parents' expense account."
"You cannot maintain a strong economy if you don't make things," said U.S. Sen. Hillary Rodham Clinton, noting that is part of the risk of relying on Wall Street.
AMD officials said Tuesday the financially troubled company will go ahead with plans for the Saratoga County chip fabrication plant by spinning off its factories into a new joint venture with investment from Abu Dhabi in the United Arab Emirates.
"It could be one of the most significant technological developments this country has ever seen," Paterson said. He noted, however, that two federal approvals are required for the major investment by a foreign company.
The announcement was made at a Tuesday afternoon press conference that also included state legislative leaders, U.S. Sen. Charles Schumer and Hector Ruiz, a former AMD chairman. Ruiz will be chairman of Foundry, which will absorb AMD's manufacturing plants, including two in Dresden, Germany.
Paterson said the state will provide its funding as the project progresses and will be affordable because New York is returning to its manufacturing roots for steady, high-paying jobs.
"But now," Paterson said, "We are going to manufacture the products of tomorrow."
"We are once again at the forefront when it comes to manufacturing and jobs," Schumer said. "It means that upstate New York is back on the map."