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global admin building two
COURTESY PHOTO Shown is a rendering of the new 221,000-square-foot office building GlobalFoundries officials plan to build next to the company's $4.6 billion computer-chip factory in Malta. The building could house up to 1,500 employees.

MALTA -- Tom Wood was just one of many smiling faces at the Luther Forest Technology Campus on Thursday morning, as GlobalFoundries broke ground for a new administration building.

GlobalFoundries also announced two other major milestones: its newly constructed semiconductor manufacturing facility, or fab, is ready for equipment two months ahead of schedule, and the move-in for its first administration building has been completed.

"Talk is one thing, but physically breaking ground, construction is going to commence here," said Wood, Saratoga Supervisor and chairman of the Saratoga County Board of Supervisors. "This is a big deal short-term and a big deal long-term.

"I look out in the parking lot, I see the number of cars out there, and every one of those cars represents a family and a job. It's really an uplifting day."

Fab 8, GlobalFoundries' behemoth manufacturing facility, was deemed ready for equipment installation two months ahead of its Sept. 9 target date by Norm Armour, the fab's vice president and general manager. Production of semiconductor wafers is scheduled to ramp up in the summer of 2012.

"We've actually started installing our production equipment in the fab two months ahead of schedule, which will allow our ramp to happen earlier next year," Armour said. "We started installing select tools as early as June 1, so we have about 30 tools in the fab right now ... It signifies a changing of the guard, as our facilities and operations teams take over from our construction teams."

Construction will be ongoing inside Fab 8, but the outer shell is complete. The expanded Fab 8 facility, under construction since 2009, will house 300,000 square feet of clean-room space.

"Semiconductor manufacturing tools are what we use to actually produce the semiconductor wafers," GlobalFoundries spokesman Travis Bullard said. "These tools can range from $35 million to $40 million apiece. It's a major process to bring these tools in ... It takes us about a year from now to get all the tools up and running.

"So about this time next year, we'll be producing what we call ‘risk' wafers. That's our first wafers that will come off the line; we also call them ‘pipe cleaner' wafers," Bullard said. "They generally come out with some defects, so we start to tweak the process, and as we drive the number of defects down, we start to ramp up the volume. So we'll be producing in volume late next year, early 2013."

The groundbreaking was attended by a number of dignitaries, including U.S. Rep. Chris Gibson, R-Kinderhook, state Sen. Roy McDonald, R-Saratoga, and several Saratoga County supervisors.

The new three-story, angle-shaped administration building, called "Admin 2" in company nomenclature, will feature 221,000 square feet of office space and will initially house 450 employees. The $35 million project is expected to be complete in August 2012.

Armour said Admin 2 would support the company's expanded current and future business needs and could eventually accommodate up to 1,500 employees.

Earlier this week, GlobalFoundries completed the process of moving about 450 employees into the newly completed Admin 1 building.

Future expansion of the GlobalFoundries campus is being looked at, though infrastructure concerns remain, particularly the development of a backup water source, which is still in negotiations.

Bullard said the entire site is 222 acres and is zoned for up to three fabs. However, any further expansion hinges on state money, just as the construction of Fab 8 depended on a $1.2 billion incentive package from the state - the largest public-private economic development project in state history.

The state has been reluctant to offer more incentives.

"The state has been very supportive. They want to see more development on the site. We have been talking to them for the last couple of months about the possibility of additional incentives," Bullard said. "At this stage, they're not willing and able to do a similar-type incentive package, but we're keeping the door open with them.

"One of our top choices is to do another module here, but we have to have those incentives in place. Otherwise, the financial model just doesn't work for us to do more investment here."

Armour said GlobalFoundries has "a vested interest in building out our fab here and turning it into a world-class operation. We think it's a great place to continue our presence. That's why we expanded the size of our fab; that's why we hired more people than we originally planned and we're investing more capital dollars.

"I understand the economic climate right now in New York and the U.S.," Armour said. "On the other hand, if we can create another 6,500 jobs and another $290 million in payroll ... that's a huge thing for the local economy. We're still hopeful we can reach an agreement. I think we can make it a win-win for the state and GlobalFoundries."

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