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Costing $3.5 billion, the new fab is set to open in 2010

Earlier this month, DailyTech brought you details about AMD's plans to open a fabrication facility in the state of New York. Although details at the time was sketchy and most of the information was unconfirmed, AMD's chairman Hector Ruiz this week announced that AMD will indeed be opening a facility in New York's Luther Forest Technology Park in Saratoga County.

AMD is expected to be spending upwards of $3.5 billion by the time the plant is finished. The plant is going to be home to more than 1000 employees and AMD says it should be completed sometime in 2010. In previous reports circulating online, it was indicated that New York state had been busy putting together an incentive package for AMD worth somewhere around the $1 billion mark. For New York state, having AMD build a new facility will introduce a big boost for the economy -- new jobs are created and the state gets more taxes. AMD is investing a lot into expansion recently, as the company also announced plans to spend roughly $2.5 billion to increase capacity at its Fab 30 facility in Dresden, Germany.

On the other side of the fence, Intel is making an effort to expand as well. Being AMD's biggest competitor, Intel announced too that it would build a new facility in Europe. Spending about $2 billion, Intel will open its first 65nm facility in Europe. Called Fab 24-2, it will be a major expansion on Intel's existing Fab 24 and will bring 300mm wafer production into the production line. Intel says that Fab 24-2 will be one of its largest.



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RE: Let's look at that per-job cost, shall we?
By masher2 (blog) on 6/26/2006 9:11:21 AM , Rating: 2
> "Well I can only believe that in the end having both jobs, a major tech manufacturing center and extra traffic in any given area will be a plus."

Sure it will. I just wonder if it'll be worth the price tag. As I said-- it very well could be, but I've seen other cases where myopic politicians went overboard on incentive packages.

> "You mention roads will cost a lot. As you urself say that the goods transportation from that type of factory is considerably smaller than comparable sized factories."

True...but you need the roads whether they're used by one truck a day or one hundred.

> "I can't really imagine how many more roads a "small" factory like this can need?"

In most cases, a facility this size is located on new development, which means roads must be built *to* it. Take the case of your parents factory, for instance. Unless its very small and was built within an existing industrial park, I strongly suspect the "existing" public road was constructed when the factory was.

> "Regarding power. That it's state owned is actually a plus too. The state can turn up the price for industry power usage"

Legally, they cannot charge this plant more than any other industrial user. And if they charge them all a rate too much higher, they drive industry out of the state.

New generating capacity is hugely expensive, and takes decades to amortize. This is why every power company in the nation (even state-owned ones) advocate you actually use LESS of their product, not more.



By Zoomer on 6/28/2006 11:02:19 PM , Rating: 2
The roads built to serve the plant is fine. There will be more investment around the plant (diners, housing, cinemas, malls, other entertainment, sports, hotels (for visiting company execs?), cleaning services, etc. These workers may have families. So schools, R&Rs, etc. The new facilities would attract even more workers.

Besides, there would be companies setting up shop besides the plant to provide goods or services to it. For example, transportation companies, packing material suppliers, the fab equipment's manufacturer's office for tech support or servicing when sometimes goes wrong, etc.

I believe economists call this the multiplier effect.


By Murst on 9/28/2006 3:56:13 PM , Rating: 2
Do you not realize that NY is not paying 1B to AMD? Your entire argument is based on the assumpting that somehow the state of NY is giving AMD 1 billion dollars to build something.

The package is most likely incentives. Most of the 1 billion package is most likely tax breaks. The state doesn't spend a dime on stuff like that. And if the incentive program wasn't there, the fab would be built somewhere else, hence no gain whatsoever to the state of NY.

You people need to realize that when the state creates a package for a business to develop in the area, they're not sending a $1B check to the CEO.


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