AMD chip factory capacity could grow: Production at plant tied to size of investment from Abu Dhabi fund

MALTA, Dec 03, 2008 (Albany Times Union - McClatchy-Tribune Information Services via COMTEX) -- AMD | Quote | Chart | News | PowerRating -- The manufacturing capacity of a computer chip factory planned for Saratoga County could grow, depending on how much the Emirate of Abu Dhabi invests in the venture.

The $4.6 billion factory, or chip fab, is being planned by a joint venture between Advanced Micro Devices Inc. and the Persian Gulf country.

AMD, which originally announced plans for the chip fab in June 2006, is spinning off its manufacturing operations to create a foundry that will make chips for AMD and other companies.

Much of the new venture is being funded by oil-rich Abu Dhabi.

A government-owned fund there, Advanced Technology Investment Co. LLC, will invest $2.1 billion in the new venture, temporarily called The Foundry Co. AMD's two existing chip fabs in Germany will be included in the deal, and there are plans to build the factory in Saratoga County.

ATIC has also vowed to invest between $3.6 billion and $6 billion over the next five years, money that will be used on the German and New York facilities.

The amount of that investment will determine how many computer chips the Saratoga County factory makes each month, according to documents approved by the state on Monday,

Chip fabs are technically wafer factories, where circuitry is printed onto silicon wafers that are later cut into individual chips.

The Saratoga County plant, planned for Luther Forest Technology Campus in Malta, will produce 12-inch wafers.

The project is in line to receive $1.2 billion in economic incentives from the state. The package was originally awarded to AMD before the company began experiencing financial difficulties, which led to the decision to split manufacturing from design.

On Monday, Empire State Development Corp., the state's economic development arm, approved the transfer of the incentives to the new joint venture.

Although most of the language was the same as the original agreement, the new document contains new details.

The document puts the project price at $4.3 billion. AMD officials, meanwhile, have said it will cost $4.6 billion, up from $3.2 billion in 2006.

But the ESDC document also says the project could be worth as much as $4.9 billion if Abu Dhabi decides to increase its investment.

That additional money would pay for manufacturing equipment that would push the plant's capacity from 25,000 wafers a month to 35,000 wafers.

Under such a plan, New York state's cash contribution of $650 million to the project would not increase. However, AMD's tax breaks would increase from $310 million to $340 million, ESDC documents show.

The number of jobs created -- 1,465 -- would be the same under either scenario.

An AMD spokesman could not be reached Tuesday for comment.

A public hearing is scheduled for 1 p.m. Dec. 10 at the offices of the Luther Forest Technology Campus Economic Development Corp. in Malta.

After that, the Public Authorities Control Board must approve the incentive package, Its next regular meeting is Dec. 17.

Larry Rulison can be reached at 454-5504 or by e-mail at lrulison@timesunion.com.

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