IBM Agrees to Invest $1.5 Billion in New York

State Will Invest $140 Million to Secure IBM Commitment, Creating 1,000 News Jobs

(July 15, 2008) - Governor David A. Paterson today announced significant new investments by IBM and New York State, accelerating New York State’s international leadership in nanotechnology research and development and creating up to 1,000 new high-tech jobs Upstate. The State will provide a total of $140 million in economic development grants, leveraging more than a ten-to-one private investment of $1.5 billion from IBM.

The investment will go toward three separate and complementary components of a comprehensive project, supporting the nanotechnology chip computer activities of IBM: the expansion of IBM’s operations at the College of Nanoscale Science and Engineering at the University at Albany (Albany NanoTech), the creation of a new, advanced semiconductor packaging research and development center at a to-be-determined in Upstate New York, and the upgrading of IBM’s East Fishkill facility in Dutchess County.

"With this announcement, we are once again demonstrating that New York State is open for business. We offer a highly skilled workforce and high quality of life. New York State is also, now more than ever, a clear national leader in nanotechnology development,” said Governor Paterson. “The positive effects of this critical investment will be felt for a generation, and will be the catalyst for other high tech business development throughout Upstate New York. Our State has become the leading location for nanotechnology research and development."

The three projects will collectively advance "nano-chip" technologies, including cutting-edge chip design, demonstration, and testing which all takes place at Albany NanoTech. Nano-chips each carry billions of transistors, and applications include high-end personal computers and laptops; high-performance servers and supercomputers; virtual reality and advanced electronic games; medical devices and components; ultra-fast telecommunications devices; "sensor-on-a-chip" systems for anti-terrorism and "soldier-in-the-field" remote monitoring and sensing.

"This agreement demonstrates the potential of public-private academic collaboration. IBM applauds the bold leadership of Governor Paterson, Senator Bruno, Speaker Silver and other New York State leaders for their commitment to high-tech economic development,” said Dr. John E. Kelly III, IBM senior vice president and director of research. “These new investments will spur continuing advancements in nanotechnology and semiconductor research and development – including new efforts in semiconductor packaging – propelling IBM chip innovations and solidifying the state's reputation as a high-technology leader."

IBM has agreed to expand its operations at Albany NanoTech and the State will also provide $25 million to acquire state-of-the-art infrastructure and advanced semiconductor tooling at that location, resulting in the creation of 325 new research and development jobs.

To build on the successes at Albany NanoTech, the State will invest $50 million toward the establishment of a new, 120,000 square foot semiconductor packaging center at a to-be-determined location in Upstate New York. This center will be established, managed and owned by the College of Nanoscale Science and Engineering, with IBM conducting operations at that site. Rensselaer Polytechnic Institute (RPI) will also be a research partner in the new packaging facility. It is expected this public-private partnership will ultimately create over 675 jobs.

Today’s agreement will also help IBM retain more than 1,000 key semiconductor jobs at its East Fishkill plant in Dutchess County. The company has agreed to provide significant resources to upgrade that site with state-of-the-art technology. The State will additionally provide $65 million toward that effort.

U.S. Senator Charles E. Schumer said: "One thousand high-paying, high-tech jobs is terrific news for all of Tech Valley and Upstate New York. Not only will it secure thousands of IBM jobs in the Hudson Valley, but it strengthens IBM’s presence at the world-renowned Nano Campus at UAlbany, and bolsters the network of nanotechnology suppliers across upstate. I had several discussions with our State leaders as this deal took shape and I know how hard they worked with IBM and the NanoCollege to put it together. I am confident that it will have a major economic development and job impact on the Upstate economy for years to come."

Senate Majority Leader Dean G. Skelos said: "I applaud Senator Joe Bruno for showing, again, his leadership in getting a deal done to create new jobs for the Capital Region, the Hudson Valley and all of Upstate New York. For over a decade, Senator Bruno has been the catalyst for high tech economic development projects that have created tens of thousands of new jobs. As the new Senate Majority Leader, I will continue our efforts to encourage new business growth to revitalize all of Upstate New York. I look forward to working with Governor Paterson to make New York more economically competitive with other states and countries so we can have many more job creation announcements such as this across the State."

Assembly Speaker Sheldon Silver said: "Today’s announcement is great economic news for the people of New York State and another sign that New York is regarded as a leader in nanotechnology research and development. We are saving 1,000 jobs in East Fishkill, adding 1,000 jobs to the upstate economy and expanding by at least 325 the number of jobs at Albany NanoTech. This is the crux of the Assembly’s High Tech Agenda – creating the jobs of the future and protecting existing jobs – and we have successfully achieved these goals with this agreement."

Senator Joseph L. Bruno said: "Over a decade ago, we in state government developed an ambitious plan in which we sought to combine the resources of government, higher education and business to attract investment and job creation in the high tech sector. Today's announcement is the culmination of these efforts, creating new opportunities in the field of nanotechnology while sending a clear message to the rest of the world that the Capital Region is the place to be in the development and production of technologies to be used by future generations."

Alain Kaloyeros, Senior Vice President & Chief Executive Officer of the College of Nanoscale Science and Engineering, said: "We applaud Governor Paterson, Speaker Silver, and Senator Bruno for this visionary and pioneering investment in the global IBM-CNSE partnership with important technological, economic, and social implications to New York, particularly Upstate. To my knowledge, this initiative represents the first cross-regional collaboration in New York’s history, with critical job creation and funding benefits spanning from Buffalo to Hudson Valley."

Avi Schick, President and Downstate Chief Operating Officer of the Empire State Development Corporation, said: "IBM's investment has helped vault New York to the head of the class globally in cutting-edge nanoscale technology, and the company's research, development and manufacturing efforts have helped establish New York's tech valley corridor as an exciting, state-of-the-art economic engine. IBM's enhanced commitment reaffirms New York's status as a magnet for companies wishing to develop and commercialize technical advances, bringing additional investment and jobs to New York."

IBM intends to extend its investments and semiconductor research and development partnership alliances to meet the increasing challenges of producing future semiconductor chips with 45-nanometer (one billionth of a meter), 32nm and smaller geometries, and to develop the required complementary advanced packaging technologies. Semiconductors have become increasingly sophisticated to meet growing demand for advanced computer systems, telecommunication devices and highly complex and multifunctional digital consumer electronic products.