With the world’s leading nanotechnology research facility in Albany—and a $5 billion GlobalFoundries computer chip plant in Saratoga County—the Capital Region finally lives up to its “Tech Valley” name.
Back in the late 1990s, when officials at the Albany-Colonie Regional Chamber of Commerce first coined the term “Tech Valley” for the Capital Region, the name seemed a bit dubious to many upstate residents— mere wishful thinking in the guise of a marketing ploy to convince outsiders that the Albany region was the next Austin, Texas, of high-tech innovation.
But just over a decade later, Tech Valley has turned a corner. No longer a hopeful stab at a self-fulfilling prophecy, we’re now truly earning the name. Sematech—the microchip consortium of semiconductor manufacturers that fueled Austin’s hightech boom of the 1990s—packed up and relocated its headquarters and operations from Texas to Albany last year.
And in the town of Malta, just 10 miles south of Saratoga Springs, GlobalFoundries is nearing completion of a massive $5 billion silicon computer chip factory at the Luther Forest Technology Campus. Known as “Fab 8,” it’s considered the most advanced semiconductor manufacturing facility in the world. Fab 8 started making its first chips for partner IBM in January and is slated to reach full production in 2013.
GlobalFoundries and IBM developed the chips being manufactured at Fab 8 at the University of Albany’s College of Nanoscale Science and Engineering (CNSE), which leads the world in the field. In the futuristic buildings that make up CNSE’s gleaming $14 billion NanoTech Complex on Albany’s Fuller Road, the feeling of excitement is palatable. Bulldozers are churning up ground for a new building—CNSE’s sixth—that will house efforts to create the next generation of cutting-edge computer chip technology. An adjacent highway, Washington Avenue Extension, is even being moved to make room for the institution’s expansion.
The new building in part will house a major initiative—the Global 450 Consortium—for the world’s largest chip companies to start making chips on 450mm silicon wafers (the current stateof- the-art size is 300mm). On a larger wafer, more chips can be produced during the manufacturing process, leading to increased efficiency.
“If you’re a company that wants to play in this field, you’ve got to be in Albany or in this region,” says Steve Janack, CNSE’s vice president for marketing and communications, as he leads a tour through winding halls of labs and “clean rooms.” Technicians in white coveralls work with microscopic computer circuits in an environment extensively controlled to reduce environmental contaminants such as dust and airborne microbes. “Everything you need to accelerate your research is here,” Janack says. “Why would you want to be anywhere else?”
High-tech insiders credit Albany’s nanotechnology institution and its chief executive officer, physics professor Alain Kaloyeros, as the driving force behind the boom of technology companies that have flooded the Capital Region in the past few years. CNSE now employs 2,700 researchers, engineers, students, and academics and has attracted over 300 global companies to offices and lab space in its facility.
Given the complexities of the semiconductor industry—where companies spend 20 percent of their revenue on research—manufacturing needs to be close to research and development, and companies tend to cluster together.
“This past year, we reached a critical mass,” Kaloyeros says. “This region is now known internationally. Companies and people want to come here. Innovation drives the industry. From a New York perspective, we’re never going to compete with China in terms of standard product. We always have to go to higher technology.”
Much of the energy industry is now driven by nanotechnology, Kaloyeros says, and the business model of the semiconductor industry—where companies collaborate and share information—is a model for clean energy companies to follow. To help the U.S. solar industry coalesce around shared innovation, the Department of Energy recently awarded CNSE nearly $60 million to lead a national solar consortium. The project could ultimately make the Capital Region the leading center for solar manufacturing in the United States.
Ripples of the new high-tech economy are being felt in Saratoga County, where the area surrounding Malta is awash in new construction. Many are support businesses for GlobalFoundries, which currently has 1,200 employees but could eventually employ 6,000 or 7,000. “You drive up and down the Route 9 corridor and you can feel the excitement that GlobalFoundries has brought here,” says a technology consultant.
Despite the sluggish economy in much of New York state, Saratoga and Schenectady counties were the only counties in the region to experience significant job growth during the 12-month period ending in June 2011, according to U.S. Department of Labor data released in February. Wages in Saratoga County rose by 7 percent—a bigger increase than anywhere else in the region—and an influx of high-paying semiconductor industry jobs played a role.
It took years of efforts by state and local officials to attract GlobalFoundries— a spin-off from Advanced Micro Devices (AMD)—to a large parcel of land in Malta where the federal government tested Hermes rockets in the 1940s and ’50s. New York state invested more than $1.2 billion in tax credits and refunds to lure the company, and state and local spending contributed up to $300 million to add water, sewers and roads.
But the lucrative financial incentives— matched by competing offers from Russia, China and Brazil—were not the only factors that brought the chip plant here. The proximity of the NanoTech Complex in Albany—and other elite academic institutions such as Rensselaer Polytechnic Institute in Troy—played a major role, as did the geological and physical characteristics of the site. The company needed a place that experiences few ground vibrations, for one, and has the infrastructure to feed the plant’s prodigious need for water and power.
“We committed to a major incentive package and barely beat out some other people,” says Mike Relyea, president of the Luther Forest Technology Campus Economic Development Corporation, a nonprofit spun off from the Saratoga Economic Development Corporation. It was the SEDC that launched the first efforts to develop Luther Forest into an industrial park over a decade ago.
“The stability of our area was a big attraction,” says Relyea. “The company has to be able to recruit people from all over the world. People love Saratoga.”
TEC-SMART AND SAVVY
The presence of an educated local work-force was another significant factor in the decision of GlobalFoundries to open up shop here. Next door to the chip plant—in a mock “clean room” at Hudson Valley Community College’s new green-certified TEC-SMART campus—students garbed head-to-toe in white coveralls learn the skills needed to compete for entry-level jobs in the semiconductor manufacturing industry. “Our instructors went to Dresden, Germany, to visit AMD to learn what classes would be needed,” says Penny Hill, TEC-SMART’s associate dean.
Students at TEC-SMART—where wind turbines in the parking lot provide some of the campus’ power—can also study toward degree or certificate programs in wind, solar and alternative fuel technology. It’s largely hands-on learning, with students practicing solar installations on a mock roof, working in an alternative fuel lab with hybrid vehicles, or practicing the skills needed by wind technicians on a large turbine outside the General Electric-sponsored wind energy lab.
“We wanted to align ourselves with where the job growth is going to be in the future,” Hill says. Through HVCC’s Clean Technologies and Sustainable Industries Early College High School program, students from nearby Ballston Spa High School take classes on the campus as well, and the program will be expanded to additional high schools next year.
“Growth in the region is going to be around high-tech jobs,” says Hill. “Just look and see where computer chips are used—there’s an insatiable need for chips.”
TEC-SMART is located in a tree-lined technology park adjacent to the Luther Forest development called the Saratoga Technology + Energy Park (STEP). A 280-acre park of mostly forested land—with tightly clustered buildings that house clean energy companies—STEP is operated by the New York State Energy Research and Development Authority (NYSERDA).
CLEAN AND GREEN START-UPS
“NYSERDA decided back in 2001, well before GlobalFoundries came on the scene, to provide a place for clean energy companies here,” says Bob Callender, the agency’s vice president for operations and energy services. “The park reflects our mission to use technology to help the state solve pressing energy and environmental problems—in ways that promote economic development.”
Increasing numbers of high-tech companies such as Lockheed Martin and Electrovaya are relocating to STEP in Malta. Based near Toronto, Electrovaya manufactures battery systems used in everything from life support systems for NASA space shuttle astronauts, to deep-sea submarines and hybrid cars, using a less toxic, virtually waste free process.
As the company increasingly adds high volume projects—such as a contract with Chrysler to provide battery packs for a Department of Energy-backed demo project to produce plug-in hybrid versions of the Dodge Ram truck—they expect to hire more people locally, says Bruce Coventry, vice president of operations. “We’re trying to draw from HVCC TEC-SMART, which is producing candidates who can walk right in our door,” he says.
Electrovaya joins the ranks of other high-tech green companies in the Capital Region, including GE Wind Energy in Schenectady; fuel cell maker Plug Power in Latham; and Ecovative Design in Green Island, a startup producing mushroom-based biodegradable materials for packaging and home insulation. And the Army-owned Watervliet Arsenal is successfully marketing its excess space to a bevy of technology companies, including nanotech firm Vistec Lithography, which relocated from England in 2008.
“The stability of our area was a big attraction. The company has to be able to recruit people from all over the world. People love Saratoga.” —Mike Relyea, president, Luther Forest Technology Campus Economic Development Corp
Coventry credits New York Governor Andrew Cuomo, who took office on January 1, 2011, with creating a climate that is accelerating the relocation of high-tech companies to the area. “There was a period when businesses would run from New York,” Coventry says. “Now they’re running to New York. It’s amazing what leadership can do. When Cuomo came into office, he very early on established a position that said he was going to draw businesses here.”
It’s hard to fully gauge the potential for future growth, but Luther Forest head Mike Relyea notes that GlobalFoundries has the space to build two more plants on its site, and he is working to draw two more large manufacturing facilities to Luther Forest.
“It’s very important for us to diversify,” Relyea says. “The semiconductor industry has peaks and valleys. It’s a cycle. But we think it’s here for the long-term. We’re literally just in the beginning of all this. The impact of this could be felt from Glens Falls down to Kingston and over to Utica. The overall growth that this type of development spurs—if it’s done right—is a region that big.”
GOING GLOBAL IN WILTON
In Wilton, north of Saratoga Springs, where the area off Exit 16 contains some of the region’s last developable land close to the Northway, officials from the Wilton Global Job Development Corporation are marketing land next to the ACE Hardware distribution center. They envision an office park for companies that provide support or complementary services to GlobalFoundries and other technology-related industries.
“Exit 16 is easily the most viable location for companies to relocate,” says Raymond O’Conor, Wilton Global Job Development Corporation president and CEO of Saratoga National Bank. “As you work your way north, Exit 17 doesn’t have central water or sewer. Exit 18 and 19 are developed out. Further north you get to the Adirondack Park. Head south and at Exit 15 you’ve got one of the largest retail complexes in the Capital Region. The expectation in the Saratoga Master Plan is that Exit 14 will remain green and open. And Exit 13 has properties with businesses already on them and environmentally sensitive land. Exit 16 is really it.”
While some applaud the potential for development and job opportunities in the region, the specter of rampant growth gives other residents pause. “My personal philosophy is you’re either moving ahead or you’re falling behind,” O’Conor counters. “It doesn’t matter whether you want things to change or not, they’re going to change. You can decide whether you want to be a community that decays over time, or a community that moves ahead and stays economically and socially vibrant.”
KEEPING THE COUNTRY IN THE CITY
But undoubtedly, balancing growth with the need to protect the character that makes Saratoga Springs—sometimes called the “City in the Country”—an attractive place to live and do business will be a challenge in coming years.
Maria Trabka, executive director of Saratoga P.L.A.N. (Preserving Land and Nature), agrees that the county should focus on concentrating development along the Northway corridor—in existing hamlets and villages when possible—while looking to protect land on the east and west flanks of the county—where there are farms, working forests, good soil and critical natural areas.
Trabka points out that the county has a green infrastructure plan, adopted by the county Board of Supervisors in 2006, that identifies natural areas, trails and farms that should be protected through tools like transfer of development rights, which allow development in one area in exchange for conservation in another.
“All the people coming here are going to need places to hike, go bird watching, buy food from local farms,” she says. “If you have a plan in place and you know what you want to protect, development can actually provide an opportunity for conservation. As long as local municipalities look at the county’s green infrastructure plan and use it, I think we’ll be in good shape.”
In Albany, Kaloyeros thinks the state will be able to use its growing leverage with high-tech firms to spur redevelopment in parts of downtown Albany needing revitalization.
“Downtown Albany is challenged and companies have left,” he says. “There’s a great opportunity to encourage companies to rehab properties and start bringing people back to downtown Albany, and do it in a way that makes sense.
“We truly have become a field of innovation and economic development for upstate. But we can’t take things for granted. The sound bite that captures what all this is about is what Governor Cuomo said recently: ‘New York is open for business.’ That wasn’t an invitation. That was a statement of fact.”
Story and photographs by KIRSTEN FERGUSON
Published in Saratoga Living magazine, Spring 2012