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Global Foundries Deal With IBM Could Attract Additional Businesses

Lucas Willard

Some in Saratoga County are praising the recent deal between computer chip manufacturer Global Foundries and IBM, saying that it could bring more economic opportunity to the region.

IBM announced earlier this week that its chip manufacturing business would be acquired by  Global Foundries, which operates a chip fabrication plant in Malta, in Saratoga County.

As part of the deal, Global Foundries will take over operations at IBM’s plants in Essex Junction, Vermont and East Fishkill, in southern Dutchess County. IBM is paying Global Foundries $1.5 billion as part of the deal.

Todd Shimkus, President and CEO of the Saratoga County Chamber of Commerce, said the deal proves the commitment for a company that has already had an enormous economic impact on the region.

“This deal with IBM really I think really solidifies them as only one of only 3 or 4 remaining companies in the world that are making semiconductors in what is a booming business."

Shimkus said Global Foundries to date has invested $12 billion in the area, and has a payroll of $338 million. Shimkus said 65 percent of workers live within the county.

Global Foundries is the sole tenant of the Luther Forest Technology Campus, operated by the Saratoga County Economic Development Corporation. Shimkus said the deal could help attract more business to the region.

“I do think that supply folks that were working with IBM and/or Global Foundries, you know have three potential areas where you might have to provide your services or product. And we're the most centrally located place to do that, so I do think there's huge advantages to being able to attract additional companies and investment."

Global Foundries’ expansion and construction efforts have been heavily incentivized by New York state tax breaks.

113th District Assemblyman Jim Tedisco said he’s proud the company continues to grow in the Northeast.

“We’re proud of it, we’re happy we were a part of it and supported it and helped initiated it, but we want to make sure we're all working together as a team. And that's why this is growing and accomplishing what it's accomplishing."

In Malta, Global Foundries is currently working to construct a $2 billion research and development center.

Cathy Hill, a professor of business administration at Skidmore College, said the deal between the two companies could have an effect on the new facility, and also attract others.

“Well they’re taking over all the IBM contracts that are a part of that business, which means for Global Foundries it expands their customer base, and as it expands their customer base, they're going to have employees at the R&D center here, given the proximity of the other factories to work on ways to advance those businesses through technological or business process innovation."

Hill said the fact that Global Foundries is expanding in the Northest and not elsewhere shows the commitment of state government and the Cuomo administration, as well as the ability of the nanotech college now called SUNY Polytechnic to “create a platform that creates jobs for the region.”

Lucas Willard is a reporter and host at WAMC Northeast Public Radio, which he joined in 2011.
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