Amidst all the active news about new process introductions at 16/14/10/7nm and the status of next-generation lithography development, there was a recent press release that could have as large an impact upon the microelectronics industry in the United States. A groundbreaking ceremony was recently held in Marcy, New York for a new fab, to be run by ams AG, formerly known as austriamicrosystems AG (link here).
ams AG focuses on the design and manufacture of analog IC’s, with specific emphasis on sensors, power management, and wireless networking applications.
This fab will initially focus on products at the 130nm process node, with plans for more advanced nodes in the future. The goal is to be operational by YE’2017, with high volume manufacturing commencing in early 2018.
There are two aspects to this announcement that are particularly noteworthy, IMHO.
First, there remain significant capacity constraints industry-wide at older process nodes.
Second, the financial arrangement provided to support this new fab is extremely unique, at least in the United States. The land and 360,000 sq. ft. building complex located at the SUNY Polytechnic Institute will continue to be owned by SUNY, with the facility available to ams AG on a 20-year lease “at very attractive rates”.
ams AG will invest ~$2B to ramp the new facility, with a commensurate number of new jobs, estimated at ~700. (Indirect jobs outside ams AG to support this facility will increase the total additional employment.)
To be sure, there have been business incubator facilities established as extensions to public institutions, such as universities. The goal of these relatively small sites is to facilitate the spin-off of new entrepreneurial pursuits, usually based on advanced academic research. These university parks offer low overhead, attractive financial terms for these small firms.
Yet, to my knowledge, this is the first example in the U.S. of a public institution establishing a build/lease financial model for an established microelectronics company to equip and maintain a new fab for high volume manufacturing.
When the deal was first announced last year, the SUNY Poly site development team said, “At the direction of the Governor, SUNY Poly has entered into a strategic research, development, and manufacturing partnership with ams AG.”
Governor Cuomo himself said, “This is a transformative moment, that will make a difference in peoples’ lives in the Mohawk Valley for generations to come.”
New York, and specifically, Governor Cuomo, have been spearheading public-private partnerships in the microelectronics industry, as led by the Nanotech Initiative at SUNY-Albany. This latest deal takes the financial relationship for a production manufacturing fab to a new level.
Is this new partnership model for microelectronics indeed something that public resources in the U.S. will increasingly support? Is the U.S. at a disadvantage compared to other countries due to its reticence to invest in these kinds of partnerships? Will other states and/or the federal government be willing to make similar economic investments to grow semiconductor manufacturing here?
How do public taxpayers minimize the risks of financial loss in these ventures? (Although not in the microelectronics area, the economic stimulus provided by the federal government to Solyndra in 2009 comes to mind.)
Time will tell, I suppose, whether the New York-ams AG partnership is indeed a public-private “win-win”. It is definitely a new, innovative approach toward revitalization of a region and of a domestic manufacturing industry.
PS. It was reported that Governor Cuomo was at one time considering a Democratic Presidential campaign in 2016 – that would no doubt have resulted in some interesting economic development-related discussions among the candidates. 🙂
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