Second fab sure to bring more jobs, tech prestige to the region
Globalfoundries CEO credits Apple’s first iphone with launching digital revolution
You can thank the late Steve Jobs for the second computer chip factory that Globalfoundries CEO Tom Caulfield promised to build at the company’s Fab 8 headquarters and manufacturing campus in Saratoga County.
Caulfield made the pledge — which will likely cost the company $10 billion or more — last week at a high-profile media event where he hosted U.S. Senate Majority Leader Charles Schumer and U.S. Commerce Secretary Gina Raimando.
Two of the most powerful people in Washington, D.C., Schumer and Raimando, will be critical to construction of the new factory to be called Fab
8.2.
That’s because Caulfield is depending on up to $2 billion in federal funding for Fab 8.2 through a $250 billion technology and science funding bill that Schumer got passed in the Senate. The bill includes $52 billion in subsidies for chip makers like Globalfoundries to build new factories in the United States.
The U.S. Innovation and Competition Act, as the legislation is called, is designed to dramatically grow the U.S. computer chip industry, which has lost its global dominance in chip manufacturing to China and Taiwan. The escalating political conflict entangling the two Asian countries over the sovereignty of the island republic could potentially cripple the industry’s supply chain. This could lead to a more severe global chip shortage than the one we are already experiencing as a result of the pandemic.
In fact, since 1990, the U.S. chip industry’s share of the global manufacturing output has been cut by two-thirds — from 37 percent to 12 percent — as Taiwan especially, and China, have been building chip fabs that increasingly serve U.S. customers.
But Caulfield, who has been leading the charge with Schumer and U.S. Rep. Paul Tonko to get the $52 billion in chip subsidies passed by Congress and signed by President Joe Biden, says the global chip shortage that emerged in 2020 in the wake of the COVID-19 pandemic has been 15 years in the making.
“All of us call for swift passage (in the House),” Caulfield said of the USICA.
A Globalfoundries spokesman said that if legislation passes, gets Biden’s signature and approval for appropriation from the Commerce Department, Globalfoundries “sure we will get our fair share of the funding, especially with the strong support demonstrated on Monday.”
Caulfield said it was Jobs’ reveal of Apple’s first iphone in 2007 that launched the true digital revolution and made semiconductor chips pervasive
in human lives — and contained in devices we use everyday, from cars to refrigerators.
“This chip shortage has been in the making for a decadeand-a-half,” Caulfield told scores of guests at Monday’s event at Fab 8 with Schumer and Raimando. “It started when (Apple) launched the first smartphone. It also created a huge problem that we face today.”
One place the chip shortage is having an impact is at U.S. car factories, which have been idled because today’s cars rely on thousands of chips inside and supply is low. Globalfoundries
is a major supplier of chips to the auto industry.
So Globalfoundries will build Fab 8.2, Caulfield promised on Monday, pending the outcome of the USICA in the House of Representatives. The impact of a new factory won’t be felt immediately: There is no timetable for completion, no price tag and no groundbreaking set.
But Caulfield said that starting right away, Globalfoundries will also build out the rest of the manufacturing floor at Fab 8 that has been idle until now. It’s a significant project that Caulfield said will cost the company $1 billion over the next several years.
Fab 8 employs 3,000 people, and the manufacturing expansion at Fab 8, plus the second fab, is expected to create the need for 1,000 more jobs at the company’s Malta campus, which also includes land in the town of Stillwater.
That doesn’t include the thousands of construction and infrastructure jobs that would be needed during construction — which will likely last through the end of the decade, with potentially other expansions as well.
Mark Eagan, CEO of both the Capital Region Chamber and
the Center for Economic Growth, both of which have been close allies of Globalfoundries and the local tech sector, said that the two expansions that Globalfoundries is planning in Malta will double the chip output of what Fab 8 currently produces and, more importantly, solidify the Capital Region’s place among U.S. and even global chipmaking hubs.
Those include Portland, Ore., Albuquerque, N.M., and Chandler, Ariz., sites where Intel has chip fabs, as well as Singapore and Taiwan among others.
“It is a huge deal for our economy and confirms our region’s position internationally in advanced semiconductors,” Eagan said of the Fab 8 expansion plans.
The Fab 8 campus could also become even bigger if Intel, the world’s largest chip maker, is interested in acquiring Globalfoundries for $30 billion, as recently reported in the media. It’s a
situation that Caulfield Monday denied.
Intel recently signed a deal to do research and development with IBM at Albany Nanotech and signaled its interest in building its own fab somewhere in upstate — but likely near Albany, making the Luther Forest Technology Campus where Fab 8 is located an ideal location.
However if Luther Forest is not ideal for Intel, the company could also consider a site in Utica that is located next to SUNY Polytechnic Institute’s Oneida County campus. Cree, a North Carolina maker of power electronics chips that regulate electricity in things like electric car batteries, airplanes and other industrial devices, is currently building a $1 billion chip fab at the Utica site.
New York state — which had officials from its Empire State Development division at Monday’s announcement — could also be involved in providing financial subsidies to Globalfoundries as it has done in the past. New York’s cash grants
and tax breaks have surpassed $1.5 billion over the past decade.
“Empire State Development welcomes discussions with any business that is looking to create jobs and invest in New York state (but) does not confirm or deny whether any potential negotiations are occurring until such time as they are concluded,” ESD spokeswoman Kristin Devoe said.
Devoe added that during Gov. Andrew Cuomo’s tenure the state has “focused on establishing a robust, high-tech infrastructure anchored by companies like Globalfoundries, IBM, Applied Materials, ON Semiconductor, Tokyo Electron and, most recently, Cree.
“No other state in the nation combines New York’s depth of talent, array of existing semiconductor manufacturers, robust supply chain, tax benefits for manufacturers, and nation-leading number of shovel-ready fab sites to offer high tech companies an unparalleled opportunity to grow,” Devoe said.