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In praise of Albany's boom Chip industry likes what it sees

Wait and see -- but you are off to a great start.

That is what some of the top executives in the U.S. computer chip industry said Thursday about the possibility of the Capital Region becoming the next Silicon Valley or Austin, Texas, where multiple chip "fabs" have been built and the technology sector grew for decades at a feverish pace.

Leaders of U.S. semiconductor companies like GlobalFoundries, Freescale Semiconductor and Micron Technology were in Saratoga Springs last week attending the annual meeting of the World Semiconductor Council, which brings together chip executives from all over the world to talk industry policy -- everything from taxes and trade to cooperation on environmental issues.

The event -- which only comes to the U.S. every six years -- was scheduled for the Capital Region because of a "clustering" of semiconductor facilities in the area, including the new $4.6 billion GlobalFoundries factory and the University at Albany College of Nanoscale Science and Engineering, which was visited last month by President Obama.

So it was only natural that attendees were asked if this area has the potential to become the next Austin -- or if it would be like Poughkeepsie or Burlington, Vt., where IBM has built one single factory in each city, and no others followed.

There are advantages to both scenarios, they said.

Rich Beyer, the CEO of Free-scale, noted that his company has two chip fabs in Austin, where others like Samsung also have multiple manufacturing facilities.

That creates an extremely competitive environment where the best talent can be poached from other companies in town, Beyer said. After all, the semiconductor industry loves to steal employees from other companies, he said.

But in a place like Burlington, where IBM is the main player, there is a sense of loyalty that creates stability for the operation, which is also good, Beyer said.

"There are some arguments for and some against," Beyer said. "It can work either way."

Most in the Capital Region's business community are hoping the region becomes the next Silicon Valley. Last fall, Gov. Andrew M. Cuomo announced a $4.8 billion consortium involving IBM, GlobalFoundries, Intel, Samsung and Taiwan Semiconductor Manufacturing Co. to develop a new way of making chips on 18-inch silicon wafers, compared with the current factories that use 12-inch wafers. The consortium envisions that this new chip fab of the future would be built right here. GlobalFoundries also has room for two additional fabs on its Fab 8 site at the Luther Forest Technology Campus in Malta.

"You're kind of on a journey here," said Mark Durcan, CEO of Micron Technology, a memory chip maker based in Idaho who said Saratoga Springs reminds him of Boise, where the company has its headquarters. "That all builds on itself. Patience is a virtue in this kind of thing."

Of course, the most important opinion is that of Ajit Manocha, the CEO of GlobalFoundries. In many ways, Manocha's decisions of whether to expand in New York or invest in the company's other locations in Germany or Singapore hold the key to how large the region's semiconductor market will become.

Manocha says the NanoCollege -- considered to be the leading computer chip research center in the world today -- is one of the major reasons why the company is spending billions of dollars here, with plans to export hundreds of billions in products each year around the world.

"This is the most advanced fab being built in the world," Manocha said of Fab 8, which the company could end of spending $7 billion on if it decides to go ahead with an expansion. "So far so good."