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Plans are already in place with local government officials but AMD did not confirm it was proceeding

According to several reports, AMD is in plans with the State of New York to build a new fabrication facility. Luther Forest, occupying 1,350 acres in the towns of Malta and Stillwater, is home to a technology park that's under review for a major project. According to local officials, plans are already in place for preparation of a large chip manufacturing facility, although when asked directly, officials declined to give details on who the company might be and when this all might occur.

AMD is in the top spot for a place in Luther Forest right now, and is actually expected to spend more than $3.5 billion to build a brand new chip fab in the area. The plant is also expected to hold more than 1000 employees. AMD itself is already in the New York area, as well as partners such as IBM. Having a long time presence in New York, IBM already has an operational chip fab located in east Fishkill. The location at Luther Forest however, has enough free space to launch up to four separate fabs. Reports also said that local government officials are hammering out plans to create funding for a potential AMD fab. Sewage, electrical and other utility resources are in the works.

AMD officials have said that there are no plans in place for a new chip fab facility and have also declined to say whether or not the company was actually in talks with local officials of New York state. AMD recently however, decided that it would invest roughly $2.5 billion in Germany, to upgrade its existing fabs in Dresden. Although no official word from AMD was given to confirm the existence of the NY fab project, it is expected that if there is one, it would take roughly 2.5 years to complete. Both Texas Instruments and Samsung were eyeing the Luther Forest area for chip manufacturing but later decided to build facilities closer to corporate headquarters located elsewhere.

During AMD's Analysis Day event that took place last week, many technology and hardware announcements were made but the company did not comment on expansion details in the US.


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How can they compete?
By kitchme on 6/4/2006 9:17:35 PM , Rating: 2
I don't know much about what it takes to open up the Chip Fab (taxes, costs, wages,...) here in the US vs. abroad (developing places), but it seems as everyone else mainly opens up and/or moves oversees to cut down on overheads, then how is it that AMD can afford it here in NY (competition-wise). Did they cut some deal? Why others don't follow AMD's example? More questions than answers. But it's good to see that. This way we don't have to invade another country when there's a political change that doesn't suits us and I guess more jobs in NY.




RE: How can they compete?
By bnme on 6/4/2006 9:56:48 PM , Rating: 3
A brand new one? Several billion USD (most likely). IBM's chip 300 mm fab in NY costs over $2.5 billion.

It's not as if they move chip fabs to where labor is cheapest. AMD's main fabs are in Dresden, Germany.

Intel has >11 fabs and >15 assembly plants, and the locations in the U.S. include Chandler, Ariz.; Santa Clara, Calif.; Colorado Springs, Colo.; Hudson, Mass.; Rio Rancho, N.M.; Hillsboro, Ore.; and Dupont, Wash.

You cannot directly compare a clothing manufacturer vs. a high-tech company when you're talking about globalisation and outsourcing.

A lot of companies open new plants and whatnot in countries where labor costs are expensive compared to the rest of the world.


RE: How can they compete?
By PrinceGaz on 6/4/2006 10:51:40 PM , Rating: 2
Yes, the investment and running costs of a state-of-the-art fab make labour costs almost irrelevant. Having a well paid highly motivated workforce in almost a given when you're dealing with facilities that cost many hundred of millions to bring online. In fact anything less than a well paid and motivated workforce will cost a lot more in the lost turnover they incur.


RE: How can they compete?
By margon on 6/6/2006 10:06:43 AM , Rating: 2
Intel has alot of US fabs but they're in tough financial shape and probably won't be able to resist the pressure to move future expansion to low wage countries


RE: How can they compete?
By PandaBear on 6/5/2006 2:55:35 AM , Rating: 2
The cost of saving $10/man hr is nothing compare to the efficiency to gain by close access to design team and experience/specialized work force in fab operation. For the cutting edge stuff, they still gain a big advantage by being next to the best work force.

FYI, an hour down in a fab can cost 10k, and wipe out any chinese/indian offshore saving.


RE: How can they compete?
By margon on 6/6/2006 10:25:35 AM , Rating: 2
proximity to the design team is a complete non issue


RE: How can they compete?
By Tsuwamono on 6/5/2006 7:34:04 AM , Rating: 2
1st. I doubt the US would invade another country because they country is taxing AMD up the anus.

2nd. Germany is certainly not a developing country. Keep in mind they use the Euro which is still higher then the US dollar.


RE: How can they compete?
By Zanfib on 6/5/2006 10:22:24 AM , Rating: 2
It is, however, east Germany which in many ways is a developing country. Short of going further east in Europe I would say you'd get the cheapest labour (even highly skilled) and lowest government costs (be they taxes, utilities or whatever) right where they are.

That said, the others are correct cheap labour does not always win out against market access and proximity to design labs.

There still are Intel and AMD facilities in developing countries (Intel in Palestine-which is not even a country per se), and India, even with their highly educated workforce still has lower labour costs.


RE: How can they compete?
By Viditor on 6/5/2006 12:06:00 PM , Rating: 2
quote:
It is, however, east Germany which in many ways is a developing country

Interesting that you consider the 3rd largest economy in the world a developing country...


RE: How can they compete?
By Zanfib on 6/5/2006 3:18:08 PM , Rating: 2
East Germany, not all of Germany.


RE: How can they compete?
By animedude on 6/6/2006 2:55:53 AM , Rating: 2
I don't think you would find alot of cheap labours in Dresden. Dresden's development is comparable to many W. German cities. Also, it has the largest technical university in Germany.


AMD is so rich now?
By kknd1967 on 6/4/2006 7:52:22 PM , Rating: 2
AMD just started their earnings since last two quarters. Now it seems that AMD suddenly became so rich and plans to build/expand Fabs here and there:p




RE: AMD is so rich now?
By mendocinosummit on 6/4/2006 8:01:21 PM , Rating: 2
Got to spend money to make money.


RE: AMD is so rich now?
By Regs on 6/4/2006 8:19:43 PM , Rating: 2
omg jobs in america!!!


RE: AMD is so rich now?
By Tsuwamono on 6/4/2006 8:37:33 PM , Rating: 2
Too bad they dont have a fab. in Montreal where i live. There are alot of high tech jobs here and even more workers who are incredibly highly skilled.


RE: AMD is so rich now?
By paperfist on 6/4/2006 8:54:46 PM , Rating: 2
Even better jobs in NY!!! They'll last oh 2 years before the taxes shut down the place :(


RE: AMD is so rich now?
By Red and black on 6/4/2006 9:35:13 PM , Rating: 4
Companies have enough leverage in placing these facilities that they always get huge tax breaks / subsidies. Don't worry about AMD's tax burden.


RE: AMD is so rich now?
By Samus on 6/4/2006 10:33:40 PM , Rating: 2
My thoughts exactly. Consider this: The German government gave AMD a interest-free loan to build the original Dresden FAB30. It was billions of dollars too. Talk about risks. They weren't even profitable then.

New York State will give AMD huge tax breaks at the least for creating those jobs.

It's kind of how we're at war in Iraq to create an artificial economy and jobs at Haliburton.


RE: AMD is so rich now?
By Dfere on 6/5/2006 10:06:12 AM , Rating: 4
How did you get from business news to an Anti- Bush rant in the space of two paragraphs? How demagougeic is that?


Free PR this brings
By ElJefe69 on 6/5/2006 12:01:51 PM , Rating: 2
When IBM left ny, it killed whole communities. (equivalent to a city in most other states).

Some say, it is still there. Well, only a fraction is.

AMD will have great publicity if it brings back a job market to NY for this type of thing. AMD would get very well known and very well enjoyed as a brand around here.

Between this and the stripping of the jobs from indians, this news makes me happy. I wish it could continue. F*** the asian countries.




RE: Free PR this brings
By bnme on 6/5/2006 2:27:46 PM , Rating: 4
Woah there. Why exactly is it that you believe you deserve those jobs more than the people in the Asian countries, who, believe it or not, are also human, have families to feed, and also want good education for their kids?

If you truely believe you deserve it. Prove it. Do it by showing that whatever cost-savings they might get from going overseas is not worth it because the people here have a lot better skills, are a lot more productive, and a lot more efficient.

From management's point of view, there is a disconnect. It doesn't make sense in some situation to stick it out and not move. It doesn't make sense to stick around when you can hire 10 engineers (who might be less-skilled on a one-to-one basis) for the salary of one engineer in North America. It's not just that. These 10 engineers are super motivated. They won't come to work late, leave early, and ask for more vacation and raises. They work overtime, skip vacations, and might actually enjoy the work they're doing. Why? It's because their standard of living isn't like yours is. You not having a high-paying techie job will not mean that you'll die from starvation or not have a roof over head to shelter yourself from the bad weather. They had to live in poverty for all these years, and now they have an opportunity to work and they want to take it, and they dang sure will want to give these companies a reason to keep them.

So while they're doing this, there are some who instead of trying harder, would prefer to complain, want protectionist laws, and put up a barrier to the rest of the world.

Quite fitting... In an interview, Tom Friedman said that when he was young, his mother use to tell him to finish his food because their were children in India and China who are hungry. He now tells his kids to finish their homework, because their are kids in India and China who are hungry for their jobs.

If you believe that you deserve those jobs. Earn it. Just like the older generations who built the U.S. and Canada to be the great countries that they are. Earn it; cause the people back then worked their butts off to give the people today in these countries what they have today.




RE: Free PR this brings
By bnme on 6/5/2006 2:35:44 PM , Rating: 2
In P5, it should be "there" instead of "their".


RE: Free PR this brings
By Griswold on 6/6/2006 8:18:23 AM , Rating: 2
That sounds all nice and noble but its by far not that simple. It doesnt really matter whether or not you work your butt off to deserve a job more, when those who decide where the jobs are generated dont notice it because the mighty $$$ makes them look the other way.

An important factor is also that life in the US or Europe is much more expensive. No matter for how little money you're willing to work, no matter how well educated you are, there are limits you cant go below and these limits usually are a good deal higher than in certain other countries where people may have similar education.

Therefore I understand the anger some people have built up. They just cant break the cycle no matter how hard they try and they have to watch jobs going elsewhere for reasons they have no influence on.

Also, comparing todays situation to days gone by isnt really fair at all. There was no such thing as globalization back then. :)

This will only get worse in the coming decades. Until these developing countries reach a point where we are today and then we shall see..


Entitlement Mentality
By bnme on 6/6/2006 4:01:24 PM , Rating: 2
If the jobs were not outsourced, these jobs would still be trimmed down in terms of numbers as time passes on. Better productivity, greater efficiency, and new technology will all make a job that use to take 10 employees to do, make it possible for a couple people to do (check auto industry as one example).

Without a doubt, some people would be angry with the outsourcing situation, but you don't get to choose where you are born. The people who were born in India didn't pick from a brochure, "Oh, Africa is a nice place to be born, lets pop out there, so we can live where the odds are stacked against you having the same standard of living as an American". You are no more entitled to having a high paying technology job than a guy or girl from India.

Yes, it's probably tough to lose a job you've been in for years, and trained to be good at, only for that job to be moved overseas where the same job can be done for 1/30th of the cost. However, it's also tough to be born in a country where the average salary is 1/30th that of the USA, where the healthcare system is nowhere as good, the education system is lagging, and in some countries, children are forced to work so their family will have enough to pay for food ( this is just an example, not mentionning any countries by name ).

Fact is, however, the unemployment rate in the U.S.A. is near a record low. Average salary is near its record high. Gas prices too high? Europeans have been paying twice as much for years, and this is not to say that you atleast have a car, compared to so many other people.

People living in these third world countries would give a heck of a lot be living in the U.S.A..

It is still the land of opportunity, and the American Dream still holds true, be it, different from what it was last century.

You are no more entitled to a job from AMD, or Intel, or Microsoft, or Google, than someone who was born and is living in India.


RE: Entitlement Mentality
By bnme on 6/6/2006 4:03:16 PM , Rating: 2
Eeeek, several corrections...

This: "The people who were born in Africa (not India) didn't pick from a brochure..."



By obeseotron on 6/5/2006 3:28:22 AM , Rating: 2
Fabs are almost always located in relatively rich countries. The infrastructure to support them is there, and rich countries tend to have the big tax break/subsidy carrots to dangle. The vast majority are in the US, Western Europe, Japan, South Korea and Taiwan.

The packaging and testing is shipped off to places because labor costs actually factor in to those tasks. These facilities are located places like China and Costa Rica.




woohoo, fabs in america!
By irev210 on 6/5/2006 10:01:13 AM , Rating: 2
Well, I really hope that New York doesnt screw this up.

Fabs in america is a great thing, jobs like that dont fall off trees.




By Dfere on 6/5/2006 10:10:37 AM , Rating: 2
Lets see, you can get $3 an hr for workers who have skills there... but what about the international management companies' fees... I have been a part of several outsourced projects. Its near impossible to get good outsourced tax and accounting functions from India, and oh yes.. they do not have the INFRASTRUCTURE to support hi tech operations. Don't confuse making a T-shirt with a chip fab..............

And also remember, as more goods are made elsewhere, and the standard of living elsewhere then increases, our wages become CHEAPER , relatively speaking....




I don't see AMD building a Fab in NY State
By Beenthere on 6/4/06, Rating: -1
RE: I don't see AMD building a Fab in NY State
By Khenglish on 6/5/2006 6:39:02 PM , Rating: 2
Yeah, it's a ways from NYC, but Albany, Saratoga, and Glens Falls are all close enough for people to make a commute. The Albany area alone has over 500,000 people including places like Rensalaer, Clifton Park, Scenectady, Troy, and the Greenbushes. Then Saratoga and Glens Falls are at least another 100,000, and you got guys being laid off by IBM for BS reasons across NY and Vermont that are looking for jobs. So overall you have many more people that could work at the planned NY fab than the complex in Dresden.


By animedude on 6/6/2006 3:00:18 AM , Rating: 2
Wouldn't AMD be better off by placing half of its experienced Fab 30 employees in the new fab in Dresden?


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