ALBANY, N.Y. (AP) - State leaders and semiconductor maker Advanced Micro Devices Inc. are in discussions to build a $3.5 billion chip manufacturing plant that could bring 2,000 permanent jobs to upstate New York, Assembly Speaker Sheldon Silver said Tuesday.
AMD, based in Sunnyvale, Calif., is considering two possible locations for the plant: One in a technology park about 25 miles north of Albany and the other on an 800-acre site in the central New York town of Marcy the state purchased 25 years ago, officials said.
''What's going on will change the complexion of the Capital Region, all of New York state from Buffalo to Plattsburgh in an extremely positive way,'' Republican Senate Majority Leader Joseph Bruno.
Silver, a Manhattan Democrat, met with representatives of AMD to discuss terms of an agreement.
Jon Carvill, a spokesman for AMD, said the company ''has made no official announcement on the location of its next fabrication facility. We can't offer any comments on rumors or speculation.''
Legislative staffers familiar with the negotiations said the state could provide more than $1 billion in incentives to the company to locate the plant in New York. The potential deal would include at least $500 million in state money for construction and equipment and $250 million in tax credits. The staffers spoke on condition of anonymity because negotiations were continuing.
Construction of a chip-making plant on a 600-acre site in the Luther Forest Technology Campus, located in Bruno's district, would create about 2,000 construction jobs for up to two years and help add another 3,000 jobs to companies created to support plant operations, said Ken Green, president of the Saratoga Economic Development Corp.
Industry analyst Roger Kay with Endpoint Technologies Associates said AMD, Intel Corp.'s biggest rival in the market for the microprocessors that act as the brains of personal computers, has been outsourcing some work to other companies such as IBM Corp., while also expanding its own facilities in Germany.
Building a plant in the United States would also give AMD a way to reach customers more quickly, he said. Worldwide chip sales are expected to total $249.6 billion this year, a 10 percent increase from last year, according to the Semiconductor Industry Association.
''AMD has faced the question of how do you ramp up production when the demand is there?'' Kay said. ''It's not cheap to build a factory. These cost $3 billion a piece.''
He noted AMD has gotten considerable subsidies for its plants in Germany.
State incentives offered to AMD would need legislative approval.
Last month, AMD said it will invest $2.5 billion to expand its production facilities in the eastern German city of Dresden. The company opened its factory for 64-bit processors in Dresden last October. It now plans to expand that plant.
In 2005, AMD, three other computer chip makers and the state announced they would spend $600 million over the next several years on a research, education and economic development project at the College of Nanoscale Science and Engineering at the University at Albany. The project is focusing on creating the next generation of computer microchips while limiting costs.
The project is getting $200 million in funding and equipment from AMD, Armonk-based IBM Corp., Qimonda AG of Germany and Boise, Idaho-based Micron Technology Inc. The state is contributing $180 million to the project, dubbed INVENT.
The state has invested a total of $675 million in the nanotech facility _ a complex of buildings that serves as home to offices of IBM Corp., Tokyo Electron Ltd. and others _ in an effort to help create practical technologies that will also help create jobs in the area.
Austin-based Sematech, a consortium of nine of the world's largest computer chip makers, has located its newest research center on the University at Albany campus.
While the Luther Forest site is the company's first choice, Silver said the other location would work just as well. The second site is located in the district of Assemblywoman RoAnn Destito, a longtime Silver ally.
Destito said it was ''very important'' to her that AMD consider the central New York location.
''We feel we have a strong site and we're looking forward to the decision,'' she said.
Bruno said Silver violated confidential conversations by talking about the deal and could have hurt the state's chances of landing the project.
''Frankly, I was very, very disappointed to (see Silver) get face time to talk about privileged conversations,'' Bruno said. ''Politics, posturing, face time with cameras is not appropriate.'' He said negotiations are progressing ''if someone doesn't blow what's going on.''