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AMD foundry spin-off breaks $4.2bn ground

Fab fab in upstate New York

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Global Foundries*, the chipmaker spun-off by AMD earlier this year, announced on Friday that it had broken ground on its $4.2bn manufacturing facility in upstate New York.

The huge plant bucks the growing trend for chips to be manufactured in Asia, and it's a significant gamble for Global Foundries and its prime investors: AMD and the Advanced Technology Investment Company (ATIC), which is wholly owned by the Emirate of Abu Dhabi.

The Reg assumes that Global Foundries CEO Doug Grose must be crossing his fingers, hoping that Abu Dhabi's oil revenues don't tank during construction, seeing as how partner AMD is struggling mightily these days and how its CFO Robert Rivet recently noted that AMD did not plan to participate in the next round of Global Foundries funding.

But soon, Global Foundries may not be solely dependent upon its troubled parent and Mid-Eastern patron. According to a report in Thursday's EETimes, the chipmaker is scheduled to announce its first non-AMD customer "within the next three to four weeks."

That customer will almost certainly receive product manufactured in Global Foundries' Fab 1, located in Dresden, Germany. Fab 1 is a 300mm facility, producing parts with a 45nm process.

New York's inevitably-named Fab 2 will also manufacture its processors and other chips on 300mm wafers and not the more-efficient 450mm, which some observers say is the wave of the future.

In its "ramp-up" phase, according to Global Foundries, Fab 2's parts will be built using a 28nm process. When Fab 2 hits its stride, that process will shrink to 22nm. Full-scale production is planned for 2012.

The 1.3 million square-foot facility is planned to be an environmentally sensitive and energy-efficient showpiece, certified as a Leadership in Energy and Environmental Design (LEED) Green Building.

Fab 2 will be situated on a 222.5-acre site at the Luther Forest Technology Campus (LFTC) in Saratoga County, New York, which describes itself as being "centrally located in New York's Tech Valley which stretches from New York City to Montreal." That's one exceptionally large valley, considering that those two cities are well over 300 miles apart.

The state of New York worked hard to land Fab 2 and has committed up to $1.2bn worth of financial incentives to the project, which Global Foundries notes is "the largest private-public investment in the history of the state."

New York's governor, David Paterson, expressed $1.2bn worth of relief at the groundbreaking, saying that "This initiative not only provides our residents with a source for new jobs, but is integral in positioning New York as a future hub of innovation and an attractive destination for additional investment."

Positioning or no, the number of jobs that Fab 2 will bring to Tech Valley is not insubstantial. Construction is expected to require 1,600 workers, with another 2,700 jobs added through the ever-magical "economic multiplier effect," according to Global Foundries.

When Fab 2 is up and running, it will employ 1,400 workers, with an annual payroll totalling $88m. Global Foundries estimates that the project will create an additional 5,000 indirect jobs, bringing the total payroll to $290m per year.

Investments, new customers, jobs. What with Global Foundries' $4.2bn investment, Intel plowing $7bn into US manufacturing plants, and Apple dropping $1bn into a North Carolina data center, perhaps the Meltdown is itself beginning to melt down. A bit. ®

* The Reg is in a quandary as to what to call the AMD spin-off. The company itself insists on GLOBALFOUNDRIES, which is simply silly. But so is Globalfoundries. We could go the standard tech-talk InterCap route and call it GlobalFoundries, but we've decided - for now at least - that simple is best: Global Foundries.

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