June 8 2017

NY told it must keep investing in chip industry

Times Union

By: Larry Rulison

Saratoga Springs – Don’t forget what  – and who – got you here.

That is what Charles Wessner, a professor of innovation policy at Georgetown University, told the crowd Thursday at the Center for Economic Growth’s 87/90 Semiconductor Summit.

Wessner, who has been studying the reasons behind the mercurial rise of the Capital Region’s computer chip industry, said that strong leadership and vision – combined with billions of dollars in state funding – was critical to the success that led to the construction of GlobalFoundries’ Fab 8 campus in Malta.

And if neither continued – especially in the wake of the bid-rigging scandal that ousted SUNY Polytechnic Institute founder Alain Kaloyeros – the region could lose its edge over the competition.

“One of the challenges that you have now is, where is Sen. Bruno? You don’t have Sen. Bruno anymore,” Wessner said. “And for better or for worse, the incredible entrepreneur you had at (SUNY Poly) is absent at present. That institution absolutely has to get preserved.” 

Wessner was referring to former state Senate Majority Leader Joseph Bruno, who helped to negotiate the original $1.2 billion incentive package back in 2006 that led to the construction of Fab 8 in Saratoga County instead of the two other places that were under consideration, Dresden, Germany and Austin, Texas.

The other reference was to Kaloyeros, who resigned as president of SUNY Poly back in October after being charged in the scandal.

Wessner was cautioning that the Capital Region shouldn’t rest on its laurels, even now after GlobalFoundries has expanded the campus way beyond its original plans by investing  more than $12 billion on the site, with billions of dollars more in spending expected over the next two years as it moves to ramp up next-generation, 7 nanometer chip production.

Wessner, a former National Academies Scholar who founded the National Academy of Sciences Technology, Innovation, and Entrepreneurship Program, even quoted John Kelly, who as IBM’s director of research convinced several New York governors, from George Pataki to Andrew Cuomo, to allocate hundreds of millions of dollars in state funds for IBM’s East Fishkill chip factory and its research operations at SUNY Poly.

“The trouble with the semiconductor industry is it doesn’t stop. There isn’t a plateau. You’re either going up or you’re going down,” Wessner said. “And as John Kelly remarked at IBM once, ‘My challenge is to explain to each governor that if he doesn’t invest again in three years, he doesn’t have a superb facility, he’s got a junk yard.'”

Wessner said he was encouraged by Gov. Andrew Cuomo’s creation of a $208 million fund created as part of the most recent state budget that has been set aside to shore up SUNY Poly programs in the wake of the bid-rigging scandal.

Empire State Development, the state agency that is currently overseeing SUNY Poly’s development projects across the state, has already started approving grants out of that fund that support projects from Rochester to Utica and Albany that had been initiated under Kaloyeros.

Howard Zemsky, the CEO of Empire State Development, also spoke at the 87/90 conference Thursday. He reaffirmed Cuomo’s commitment to SUNY Poly development across the state, including efforts to attract a semiconductor manufacturer to the Marcy Nanocenter, a 400-acre site next to SUNY Poly’s Utica campus. ESD recent approved another $5 million in infrastructure spending for a new gas line at Marcy Nanocenter, part of roughly $80 million in state funding that has already been approved.  

“In Utica we are going to succeed in planting seeds for the semiconductor industry,” Zemsky said. “We continue to build out infrastructure for a fab that will be in Utica in the coming years. The governor is doubling down on his commitment to this industry, and you should know that.”

Zemsky and ESD also recently approved a $7.5 million grant that will go to GlobalFoundries to help pay for a $210 million piece of equipment that will be installed at Fab 8 as part of its move to 7 nanometer chips.

Wessner, the Georgetown professor, said more spending will be needed in the future if New York wants to keep the chip industry growing.

“You don’t fool around,” Wessner said. “Despite all the criticism of the GlobalFoundries package of $1.2 billion, there are things to remember about that. It was $100 million more than Dresden (offered). Otherwise, it would be in Dresden, not to mention Austin.

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