Best Practices in State and Regional Innovation Initiatives Competing in the 21st Century (2013) / Chapter Skim
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7 The New York Nanotechnology Initiative
7 The New York Nanotechnology Initiative
Pages 143-164
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Zimpher as serving as a "key engine of revitalization for New York State's economy."2 SUNY Albany is one of six "NY Innovation Hubs" established to link university-based research to regional innovation, and sustained investments 1 Presentation by Dr. Tim Killeen, "The New York Innovation Economy and the Nanotechnology Cluster: The Role of SUNY," National Research Council Symposium, "New York's Nanotechnology Model: Building the Innovation Economy" Troy, New York, April 4, 2013.
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6 Darren Suarez, Director of Government Affairs, The Business Council of New York State, "Challenges and Opportunities for the New York Innovation Economy," National Research Council symposium, "New York's Nanotechnology Model: Building the Innovation Economy," Troy, New York, April 3, 2013. 7 Gary Patton, Vice President, Semiconductor Research and Development Center, IBM, recalls that 27 years ago he relocated from California to New York, in significant part, because the schools made it a good place to raise a family.
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10 Industrial College of the Armed Forces, Electronics 2010, Industry Study Final Report, National Defense University, Spring 2010. 11 Ajit Manocha, "Keynote Address," National Research Council symposium, "New York's Nanotechnology Model: Building the Innovation Economy," Troy, New York, April 3, 2013.
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to those countries. The foreign foundries have offered a cost advantage over U.S.-based production because the foreign operations benefited from lower taxes and massive government financial assistance.14 In addition, in recent decades, some foreign governments have offered incentives to U.S.-based semiconductor firms to establish local R&D and production operations.15 In 2006, Craig Barrett, then CEO of Intel, the world's largest producer of semiconductors, commented on the factors underlying his company's decision on where to locate new manufacturing facilities: The cost to build and equip a new wafer fabrication facility today is $3 billion or more.
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semiconductor industry presented an opening to New York policymakers seeking to reverse economic decline in the state's Capital region. In the early 1990s, New York's then-Governor George Pataki convened a group of stakeholders to address the fact that much of upstate New York was an "economic shambles," hemorrhaging manufacturing jobs in traditional sectors like steel as well as hightech jobs from companies like GE, Xerox, and Kodak.
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Most federal support for SEMATECH ended in 1994, but in a credit to its success, the industry participants have continued to support the consortium -- which now includes international members -- down to the present day.21 Albany Shocked the Research World and Reaped a Bonanza Worth $850 Million (and Counting) ," The Chronicle of Higher Education February 7, 2003.
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"Fall Meeting Planted Seed for Deal," Albany, The Times Union July 18, 2002. 23 "How SUNY Albany Shocked the Research World and Reaped a Bonanza Worth $850 Million (and Counting)
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and Tokyo Electron in the 2000-02 period heralded the beginning of a sustained and expanding movement of semiconductor device, equipment and supply chain firms into the Albany area. Both Tokyo Electron and International SEMATECH "were drawn by the university's construction of a 300-millimeter semiconductor research center, an expensive technology off-limits to all but the largest companies." Alain Kaloyeros, observed in 2002 that the semiconductor industry was engaged in a "tricky and expensive" transition from making chips on silicon discs 200 millimeters in diameter to 300mm, a move that would ultimately drive down costs dramatically but which entailed an unprecedented level of investments in R&D and plant.
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32 "IBM Executive Shares Vision of High Tech Future," The Times Union, February 23 2003. Pataki, a Republican, enjoyed bipartisan support for then-Senator Hillary Clinton, who cosponsored a bill in Congress to provide multiyear funding for nanotechnology research.
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CEG works to help the Capital Region compete internationally for investment. In semiconductors, CEG has been instrumental in outreach to tool and material companies whose local presence is necessary to support semiconductor manufacturing operations.34 nanotechnology research in the Albany area.35 AMD announced plans to build a $3.2 billion semiconductor wafer fabrication plant in Saratoga County in 2006, the culmination of over eight years of talks between the company and state economic development officials.36 In 2008, IBM concluded a $1.6 billion deal with New York State that included establishment of a 120,000 square foot, 675employee, R&D center dedicated to semiconductor packaging technology that would be owned and operated by the College of Nanoscale Science and Engineering (CNSE)
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43 "U Albany NanoCollege Tops Rising Star at GE," The Times Union February 9 2007. 44 "SEMATECH News boon for Albany," The Times Union October 17, 2007; "SEMATECH Deal Brings Business, High-Tech Jobs," The Daily Gazette February 24, 2008.
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announced that it would collaborate with CNSE to establish standard 45 "SEMATECH Boss Touts NanoCollege Research," The Times Union May 20, 2008.
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Researchers from rival for-profit companies like IBM, and GlobalFoundries collaborate in an innovative partnership with the school, without worrying about their technology falling into the competitors' hands.48 To a significant degree, the evolution of CNSE into what is considered "the nation's premier research facility for nanotechnology" reflects the vision and persistent efforts of Alain Kaloyeros, who was originally recruited in 1988, after receiving a Ph.D in experimental condensed matter physics from the University of Illinois, under an initiative by Governor Pataki to encourage graduate research at SUNY-Albany. Kaloyeros saw the potential of the location to support innovative research, and "found a partner in IBM to persuade privatesector technology companies to move in and spend hundreds of millions of dollars to outfit new quarters at the site with matching state funds." Kaloyeros has played a catalytic role, proving "adept at navigating Albany politics, befriending aides to leaders and the leaders themselves, and touting how his project would be good for business, the economy, for New York." Key political figures whose support was secured over time include Senate Majority Leader Joseph L
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GlobalFoundries would operate as a pure play foundry and AMD would continue as a "fabless" semiconductor producer, using GlobalFoundries to manufacture the microprocessors and other chips it designed.52 In 2009, GlobalFoundries disclosed plans for a state-of-the-art semiconductor wafer fabrication facility to be built at the Luther Forest Technology Campus in Malta, NY, about 25 miles from Albany, at an estimated cost of $4.2 billion. The State of New York reportedly pledged $1.2 billion in incentives to support the project, despite "crushing budget problems."53 It would become the largest public-private partnership in the history of the state and perhaps the country.54 For the most part, the state's large scale financial commitment to this enterprise has had no federal counterpart.55 GlobalFoundries' choice of location was influenced by a number of factors.
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58 Interview with Mike Russo, Director of Government Relations, GlobalFoundries, Malta, New York, April 3, 2013. 59 Presentation by Mike Russo, Director of Government Affairs, GlobalFoundries, National Research Council symposium, "New York's Nanotechnology Model: Building the Innovation Economy." Troy, New York, April 4, 2013.
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61 The Times Union, "Deal Puts Fab 2 in the Chips," January 21; "GlobalFoundries Says Customers Now Using its 28nm Technology," Taipei Times Online September 15, 2011. 62 "GlobalFoundries has started Production," The Saratogian January 14, 2012; "Abu Dhabi Gets Full Ownership of GlobalFoundries," The Daily Gazette March 6, 2012.
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The company's presence has led over 200 other companies to locate or expand their presence in the region, and GlobalFoundries expects its own investments may create as many as 15,000 indirect support jobs by the end of 2014.66 THE GLOBAL 450 CONSORTIUM In September 2011 Governor Andrew Cuomo announced that New York state had entered into agreements with IBM, GlobalFoundries, Samsung, Intel and TSMC to develop the next generation of semiconductor technology based on 450mm wafer size at a site in upstate New York. The state committed to invest $400 million in CNSE, with no state funds going to any individual company.
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68 Interview with David Rooney, Senior Vice President, Center for Economic Growth, Malta, New York, April 3, 2013. 69 Pradeep Haldar, "New York States Nano Initiative," in National Research Council, Growing Innovation Clusters for American Prosperity: Summary of a Symposium, C
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The first student spin-off from CNSE did not occur until 2012, eight years after the establishment of the NanoCollege.78 While the dearth of start-ups in the midst of a high tech boom is worthy of separate study, New York policymakers are concerned about the fact that "New York lags behind other states in attracting venture capital." While 75 Presentation by Drew Matonak, President, Hudson Valley Community College, National Research Council symposium, "New York's Nanotechnology Model: Building the Innovation Economy," Troy, New York, April 4, 2013. 76 "Training Technicians, Hudson Valley Style," Semiconductor Design and Manufacturing May 3, 2012.
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Department of Energy, New York state, and the private sector. Presentation by Pradeep Haldar, CNSE Vice President, National Research Council symposium, "New York's Nanotechnology Model: Building the Innovation Economy," Troy, New York, April 3, 2013.
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, offering $4 billion in incentives to companies that set up local facilities to manufacture computer chips, photovoltaic solar cells, and telecommunications equipment.84 Without continued sustained investments in R&D and seamless collaboration between industry, universities and the state government, the gains achieved to date could easily prove ephemeral. The nanotechnology initiative's economic impact on upstate New York should also not obscure the region's abiding economic problems.
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In this case, however, the driving force was not a government ministry but the SUNY university system and the flagship SUNY Albany. Through investments in SUNY Albany, the state of New York leveraged far more substantial private financial investments, facilitating the establishment of an enormously expensive, state-of-the-art research infrastructure at the university with a powerful gravitational pull on leading semiconductor devices, equipment, and service infrastructural companies.
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