IBM To Make Computer Chips In $4.6B NY Plant

GlobalFoundries Inc. and IBM announced a deal to manufacture chips at the new $4.6 billion state-of-the-art computer chip plant.

ALBANY, N.Y. (AP) — Production has started at a $4.6 billion state-of-the-art computer chip plant in upstate New York built to compete in the constantly evolving semiconductor market and to stimulate the region's economy.

GlobalFoundries Inc. and IBM announced a deal Monday to manufacture chips at the new GlobalFoundries plant, which is being built about 20 miles north of Albany in Malta. Initial production of the speedier 32-nanometer chips for IBM began at the site this year and will ramp up to full production in the second half of 2012.

Ground was broken on the massive facility in 2009 after New York state committed $1.2 billion in aid.

Bernie Meyerson, IBM's vice president of research, said the Malta fabrication plant — or "fab" — was attractive in part because it is located near the company's research facility in Albany. Also, the new plant can be used for production for a longer period in an industry that is constantly gearing up to provide more powerful chips.

"It's the most advanced fab, so it's literally being built on U.S. soil now," Meyerson said.

Sunnyvale, Calif.-based GlobalFoundries was spun off from Advanced Micro Devices Inc., and Malta's "Fab 8" was built to keep up with Intel Corp., the world's dominant microprocessor company. Intel and AMD have been in a race to continually shrink the circuitry on chips and make more powerful processors.

The chips being made at the new plant are based on IBM's silicon-on-insulator technology, which was used in IBM's Watson supercomputer, best known for beating two human "Jeopardy!" champions. IBM said the cutting-edge chips can increase the speed of graphics in gaming systems and networking applications.

New York committed the $1.2 billion to the Malta plant to add high-tech luster to the region and bolster middle-class employment in a state that has bled manufacturing jobs for decades.

The plant is a cornerstone of the state's push to brand the Hudson Valley high-tech hub called "Tech Valley." The valley also is home to the Albany's NanoTech Complex and IBM's East Fishkill fab, which also has begun producing the 32-nanometer chips.

Work on the Malta plant is almost complete and GlobalFoundries already has hired about 1,000 of the 1,400 the employee it expects to have on payroll, said company spokesman Jason Gorss.

He said Fab 8 should be operating at full volume by next year.

"Today's announcement is a natural extension of our longstanding partnership with IBM that includes production of 65 (nanometer) and 45 (nanometer) chips at our fabs in Singapore and Germany," GlobalFoundries chief executive officer Ajit Manocha said in a prepared statement. "With the addition of our newest factory in New York, we will now be jointly producing chips with IBM at four fabs on three continents."

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