Governor Pataki and AMD’s Ceo Ruiz Announce Plans For
Multi-Billion Dollar 300 Mm Semiconductor Manufacturing Plant
Plan Would Allow for the Largest Private Investment in NYS History Most Advanced Plant in the World, Creating Over 1,200 High-Tech Jobs, Thousands of Construction Jobs and More Than 3,000 Indirect Jobs
New York State --
Governor George E. Pataki, Dr. Hector Ruiz, Chairman and CEO of AMD (NYSE: AMD), Senate Majority Leader Joseph L. Bruno and Assembly Speaker Sheldon Silver today announced plans for one of the largest private sector industrial investments in New York State history -- a multi-billion dollar deal that would enable AMD to build and operate the most advanced semiconductor manufacturing facility in the world at the Luther Forest Technology Park. This unprecedented economic development project is projected to create more than 1,200 new high-tech jobs, thousands of construction jobs, and more than 3000 indirect jobs.
Under the terms of this non-binding agreement, AMD would be able to construct a new, $600 million, 1.2 million square foot facility, equipped with approximately $2.6 billion in state-of-the-art tools designed to produce 300 mm wafers using 32nm process technology. Expenditures at the facility are projected to total more than $2 billion during the first five years of operation, bringing the projected total investment to $5.2 billion. The Luther Forest site in Saratoga County was selected by AMD after an extensive review of a number of sites nationwide and internationally. The agreement enables construction on the 1.2 million square foot plant to begin between July 2007 and July 31, 2009 and be fully operational sometime between December 31, 2012 and December 31, 2014.
"This is precisely what we had envisioned when I first announced our Center of Excellence initiative five years ago. This is an historic day for the Capital Region, for Upstate and for the entire State of New York , as this agreement sends a loud and clear message both nationally and internationally that the Empire State is in the forefront of the global high-tech economy,” Governor Pataki said. “AMD is a worldwide industry leader and we're proud that they want to partner with us on this unprecedented investment bringing over 1200 high-tech jobs to Upstate. With the Albany Center of Excellence, SEMATECH, IBM's chip-fabs in East Fishkill, Tokyo Electron Limited, ASML, Applied Materials, INVENT and now AMD, we have created a powerful semiconductor industry cluster that is transforming the Upstate economy and creating thousands of new high-tech jobs. This announcement is another key step in the creation of our Empire State High-Tech Corridor and makes clear that our SEMI-New York initiative is a success. I want to thank Hector Ruiz and the AMD Board of Directors for this tremendous vote of confidence in New York State ."
“AMD's ability to serve market demand for our industry-leading technology depends on an intelligent, flexible way to scale our manufacturing capacity,” said Hector Ruiz, chairman of the board and chief executive officer of AMD. “With a growing customer base, and the hope for a truly fair and open competitive playing field, our prospects for continued momentum over the long term look strong. We were impressed by the number of locations, including Luther Forest and Marcy, that would make an excellent location for a semiconductor fabrication facility. We commend the State of New York on their tremendous commitment to this project and look forward to a prosperous collaboration moving forward.”
Advanced Micro Devices is a leading global provider of innovative microprocessor solutions for computing, communications and consumer electronics markets. Founded in 1969, AMD is dedicated to delivering superior computing solutions based on customer needs that empower users worldwide.
Currently, AMD conducts research and development with IBM at its East Fishkill facility in a partnership announced by Governor Pataki in his 2003 State of the State Address. AMD is also a partner in International SEMATECH North, INVENT, and the Center for Semiconductor Research at the Albany Center of Excellence in Nanoelectronics.
In consideration of AMD's historic agreement with the State of New York , AMD is eligible for a $500 million capital grant to defray the cost of the facility and equipment. New York will also make available to AMD a $150 million research and development grant to help develop new innovative microprocessor technologies within New York for use at the Luther Forest facility. It is also expected that AMD will be eligible for benefits under New York 's world class Empire Zones Program.
The preparation of the site, which began in September 2002, and necessary infrastructure and utility upgrades for this and future projects at the Luther Forest Technology Park is being supported with the assistance of funding from Congressman Sweeney, New York State, Saratoga County, the towns of Malta and Stillwater and National Grid. These improvements include new access and internal roads, water and water treatment lines, improved and expanded electrical service and natural gas to the site and surrounding communities. Road infrastructure and utility upgrades will total $80 million and $200 million respectively.
Today's announcement builds upon several job creation initiatives advanced by Governor Pataki throughout his administration including: The Center of Excellence Program; New York's High Tech Corridor; the SEMI-New York Initiative, and the Build New York – Shovel Ready Program. These initiatives have helped to attract billions of dollars in new investment and transformed New York into a worldwide leader in cutting-edge research and development.
ADDITIONAL BACKGROUND INFORMATION ON AMD ANNOUNCEMENT
- The plan announced today calls for an investment of approximately $3.2 billion in plant and equipment. This investment would place the Luther Forest project among the largest manufacturing projects in the US , according to Site Selection magazine. It would be comparable to a $3.5 B wafer fab in Austin , TX and a $3 B investment in Chandler , Arizona .
- Only three recent projects worldwide would represent larger total investments: a $12 billion steel plant in India ; a projected $3.5 billion wafer fab investment in Austin , Texas ; and a $3.5 billion chip-fab investment in Israel .
- The plan would also allow for the largest private-sector investment in New York State history. The previously largest investment was the $2.5 billion spent in 2000 to build a 300mm wafer fabrication plant in East Fishkill, Dutchess County .
- AMD's selection of the Luther Forest Technology Campus for their next wafer fab would represent the first time that a 300mm fab would be built at a new campus in North America . All of the previous 300mm Fabs built in North America have been expansions or built at existing semiconductor company campuses.
- Only 20% of the 300mm Fabs in the world are in the US . Asia has captured over 65% of 300mm Fab projects. AMD's Luther Forest Fab would counter this trend. AMD's Luther Forest Fab would be the fourth 300mm Fab built in New York State , making us the leader in states with 300mm Fabs. There are two 300mm Fabs in Oregon; two 300mm Fabs operating in Arizona, with one under construction; Texas is home to two 300mm Fabs with a third just breaking ground in Austin.
- According to an October 2004 report from the Center for Business Research at Arizona State University , a fab's current presence in Arizona has a $2.6 billion annual impact on the state's economy and supports 27,680 indirect Arizona jobs. Among the impact's components are approximately $50 million in taxes still paid each year by the company, $87.5 million in employee taxes and $276 million in goods and services purchased from Arizona-based businesses. Arizona has two Fabs with support facilities employing over 8000.
This release contains forward-looking statements concerning planned product and technology introduction schedules for AMD, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. AMD investors are cautioned that forward-looking statements in this release involve risks and uncertainties that could cause actual results to differ materially from AMD's current expectations. Risks that the AMD considers to be the important factors that could cause actual results to differ materially from those set forth in the forward-looking statements include the possibility that: a binding agreement related to the development of this fabrication facility is not reached between AMD and the Empire State Development Board or local governmental entities in the timeframe required under the non-binding letter of intent entered by the parties and announced herein; local infrastructure requirements are not provided or required permits for building the proposed fabrication facility are not obtained in the required time frame; or market requirements may change and the need for a new fabrication facility will not be required until a date later than that set forth in this release.
AMD urges its investors to review in detail the risks and uncertainties in AMD's Securities and Exchange Commission filings, including but not limited to the Annual Report on Form 10-K for the year ended December 25, 2005, and the Quarterly Report on Form 10-Q for the quarter ended March 26, 2006.