Globalfoundries, AMD's fab spin-off, has officially pledged to start construction of New-York-state plant targeting bleeding-edge 32nm and smaller-process silicon.

The company said Tuesday it sent a formal commitment letter to the state of New York for the construction of Fab 2 facilities at the Luther Forest Technology Campus in Saratoga County, New York. Globalfoundries' missive officially initiates the construction phase of the plant, as well as lets the state know its time to start issuing bonds to pay for development of the $4.2bn plant.

The purchase of 223 acres of the 1,350-acre technology campus is set for Wednesday. Construction is expected to take two years to complete and an additional 12 to 18 months to swing into full operating mode. Volume production is expected in 2012.

The site is expected to create about 1,400 new indirect semiconductor manufacturing jobs at full scale production with an estimated annual payroll of more than $88m. Total capital budget for the project is about $4.2bn, including local construction expenditures of approximately $800m.

"It was three years ago this month that we announced plans to build and operate the most advanced semiconductor manufacturing facility in the world in upstate New York," said Globalfoundries chairman Hector Ruiz in a statement.

"We have worked hard to develop this project while reinventing our overall business strategy and ultimately launching Globalfoundries as a new company."®