IBM builds $2.5bn chip plant in New York

Big Blue flies to Big Apple to outline plans

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IBM is to build a new $2.5 billion chip plant in New York as part of a $5 billion expansion plan.

The East Fishkill factory in upstate New York, due to be announced in the Big Apple today, will represent the biggest capital investment in the state's history. It will also be the most technically advanced chip-making facility in the world, according to the US PC maker.

The factory will combine copper interconnects, silicon-on-insulator (SOI) and low-k dielectric insulation on 300mm (12-inch) wafers. IBM said it also expects to be the first chip-maker to mass produce semiconductors at line-widths below .10 microns, more than 1000 times thinner than a human hair.

The plan is to get the factory up and running in the second half of 2002. It should create up to 1000 new jobs in the New York area as it reaches full production early the following year.

The plant is part of a $5 billion cash splurge to support IBM's chip business globally - it is also expanding chip-making capacity in its existing facilities in Burlington, Vermont, and Yasu, Japan, as well as in Altis Semiconductor its joint venture with France's Infineon.

The company is also expanding organic and ceramic chip packaging operations worldwide.

"The world of e-business is driving a massive build-out of the infrastructure of computing and communications," said Lou Gerstner, IBM CEO and chairman.

"That, in turn, drives demand for critical technical components like chips. Demand is white-hot in three critical segments - chips for big servers, chips to power the explosion in Internet access devices and chips in the networking equipment that ties everything together."

"Building on the growth of Silicon Alley in New York City and our Semi-NY program, this investment in the Hudson Valley is a perfect example of how government and industry can work together to establish New York as a home to high-tech industry," said NY State Governor George Pataki. "I thank Lou Gerstner for once again linking IBM's destiny and success to New York State's." ®

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