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Upstate N.Y. Wins High-Tech Operation

Economy: Officials hope $400-million facility for making computer chips will provide a big boost.


NEW YORK — A group of the world's largest computer chip makers announced Thursday that it will open a huge research and development center at the State University at Albany--a move that could dramatically boost New York's beleaguered upstate economy.

The $400-million facility, to be operated by International Sematech, a consortium of 12 major computer manufacturers, is set to open in the fall. It is expected to generate thousands of jobs as well as new high-tech companies in the Upper Hudson Valley, according to New York Gov. George Pataki, who lobbied heavily over the last 10 months to bring the facility to New York.

"This has the potential to be the best thing for upstate since the construction of the Erie Canal," said Pataki, who may reap considerable political advantage from the project as he seeks a third term in November. "Forty-nine other states and nations from around the globe would be thrilled to have secured this facility, but it's coming right here."

Pataki, who made the announcement at a news conference on the Albany campus, predicted that the facility would help a region hit hard by lingering unemployment and a wave of factory closings. "Today there is a buzz out there," he said, adding that a multitude of new high-tech firms "are going to look at Buffalo, they're going to look at Rochester, they're going to look at Syracuse, they're going to look across this state."

The facility, to be called International Sematech North, will be the second such operation for Sematech--an acronym standing for Semiconductor Manufacturing Technology--in the United States. The first was built in Austin, Texas, in 1988, and spurred a boom in the region. More than 2,000 technology companies are located in the Austin area, employing more than 125,000 people, many of them with high-paying jobs.

New York had competed fiercely for the first Sematech contract along with 35 other states. When the group announced plans for a second facility, Pataki began negotiations with consortium officials. He met with Sematech President Robert Helms, stressing New York's commitment to high-tech research as well as the Hudson Valley's low cost of living.

"I've seen Silicon Valley," said Pataki, summarizing his lobbying pitch. "It's hot, it's dry, there's earthquakes. Come to Albany."

Before making its decision, the group considered sites in Europe and several states. The consortium includes IBM, Intel, Motorola, Hewlett-Packard, Texas Instruments, Advanced Micro Devices, Agere Systems (Lucent), Philips of the Netherlands, Infineon Technologies of Germany, STMicroelectronics of France, Hynix of Korea and TSMC of Taiwan.

For years, candidates of both major parties have sought to use upstate New York's economic woes as an issue, and many expected that either state Comptroller Carl McCall or former HUD Secretary Andrew Cuomo--the two Democrats vying to take on Pataki in November--would do the same.

Pataki's backers believe he found a way to defuse the issue with Thursday's announcement. But McCall wondered whether the news was "an election year gimmick," and Cuomo said it was "too little, too late."

Although the new Sematech operation will initially create only 260 jobs, thousands more may be generated as the facility begins manufacturing new, state-of-the-art 300-millimeter wafers--or silicon discs nearly a foot in diameter.

Sponsors are hoping for a repeat of the Austin experience, where the rapid growth of a university center paved the way for more high-tech firms to flow into the region and cluster around the new facility.

Some have cautioned New York about expecting too much from the facility, noting that the semiconductor industry has cooled off considerably after boom years in the late 1980s and 1990s. But Semiconductor Industry Assn. analysts have said they are hoping for a small upturn this year.

Under the New York agreement, the consortium will contribute $193 million over five years toward the facility's operating budget; the state will provide $210 million, with most of the money going toward purchase of manufacturing equipment.

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