Site Selection magazine
twitter linkedIn facebook email email email
UPSTATE NEW YORK
From Site Selection magazine, September 2023
SHARE THIS ON SOCIAL MEDIA

IBM Goes All In on Chips

Big Blue’s $20 billion investment is transformative for Upstate New York.

UPSTATE NEW YORK
Niagara Falls does more than attract tourists to Upstate New York. The natural wonder anchors a quality-of-life ecosystem that is drawing talent and employers to Buffalo, Rochester, Syracuse and everywhere in between.
Image courtesy of Invest Buffalo-Niagara

by RON STARNER
M

icron may be absorbing all the attention these days as the Idaho-based memory chip maker begins work on building a semiconductor manufacturing complex that could total up to $100 billion in capital investment in Greater Syracuse, New York. But the rest of Upstate New York isn’t just standing around watching. Far from it.

Advanced manufacturing industry leaders throughout the Upstate are hard at work adding on to a rich history of technology investment in places like Rochester, Poughkeepsie and Newburgh. In each case, they were there long before Micron.

From IBM to Tesla, these industry titans are not just remaking the technological profile of the Empire State; they are fundamentally changing the future of computation, transportation, energy and cleantech.

International Business Machines Corp. (IBM), headquartered in Armonk in Westchester County just north of New York City, set the standard that all others, including Micron, now follow. When you have been doing business in the region for 112 years, that tends to happen. In Big Blue’s case, the drive to maintain its position as the largest industrial research organization in the world is stronger than ever. That drive is manifesting itself in the form of a $20 billion commitment to beef up its own semiconductor manufacturing, mainframe technology and quantum computing capabilities in the Hudson Valley.

IBM’s facility in Poughkeepsie in Dutchess County is already the No. 1 quantum computation center in America. When President Joe Biden came to town recently, the company used the opportunity to announce its $20 billion investment plan.

Jack Hergenrother, vice president of enterprise systems and technology development at IBM, tells Site Selection that his firm’s historic presence in Dutchess County is integral to IBM’s success. “We have been technology leaders in this area since World War II,” he says. “This was an area for manufacturing ammunitions used in the war. Many of the concrete floors here are more than a foot thick. We have been here for over 80 years, and it is a huge site for us. It is one of the largest IBM sites in the world. It is part of the whole IBM Innovation Corridor that we have set up with SUNY [State University of New York] Albany and other partners in the region. We have the Thomas J. Watson Research Center in Yorktown Heights and the IBM Research Albany Nanotech Center located within the Albany Nanotech Complex. We do a lot of cutting-edge semiconductor research here.”

That is an understatement. With passage of the federal CHIPS (Creating Helpful Incentives to Produce Semiconductors) and Science Act, IBM will soon be joined by an array of partners eager to jump on the semiconductor bandwagon. “It is not just IBM here,” says Hergenrother. “It is a whole cluster of partners. We make the mainframes that power the IBM economy. The IBM z16 is built here. We are proud of that machine. Ninety percent of the world’s transactions go through one of our IBM z mainframes.”

UPSTATE NY SPOTLIGHT AP-1

Students at the Northland Workforce Training Center are prepared for high-wage jobs in manufacturing and welding in Western New York.

Image courtesy of Northland Workforce Training Center

Several thousand IBMers call the Hudson Valley region home, and their ranks will soon swell. “We pledge to invest $20 billion across the region over 10 years in research and development in the Hudson Valley,” says Hergenrother. “The work we are doing in the mid-Hudson Valley is at the forefront of semiconductor R&D. This is the most advanced research out there.”

Room for Micron and More

Hergenrother says he welcomes Micron’s mega-investment into the Upstate. “A lot of the work in this field has to be managed through large collaborative partnerships,” he notes. “The work is so complex from an engineering perspective. It takes huge ecosystems.”

Huge is the operative word for Micron. The Boise-based company is committing to invest up to $100 billion and hire 9,000 workers at the 1,300-acre White Pine Commerce Park in Onondaga County near Syracuse. Micron plans to build a series of chip fabrication plants that one day will form the largest semiconductor manufacturing campus in America.

Hergenrother adds that Micron’s historic investment “puts a huge amount of focus on New York. It will raise the tide for everyone in this state and it will advance the important work of semiconductor manufacturing in the United States.”

Since New York is not a low-tax state (the Tax Foundation ranks New York as the second-worst state in its 2023 State Business Tax Climate Index), I asked Hergenrother what he would say to other corporate executives who may be contemplating a New York expansion. He answered that skill sets are the great equalizer.

“Particularly in the semiconductor industry and high tech, you need skills in order to be able to make a business and push the frontier,” he says. “That is why we are here and why we will continue to grow here. We are investing heavily in these sophisticated engineering skills in the region. If you cannot find the skills, it does not matter what the taxes are. By the year 2030, we [the U.S.] will be short by 60,000 workers with the skills we need in the semiconductor sector.”

 Leaders I talked to in the region agreed with his assessment. They said they are in Upstate New York because of the talent and workforce development pipelines capable of replenishing their labor pool — and that factor trumps the tax climate.

Lina Chiaverini, general manager of Stamford Scientific International Inc/SSI Aeration (SSI) in Dutchess County, says, “We have done a lot of manufacturing in China, Italy, India and Dubai, and two years ago we started our own factory in Poughkeepsie. We do the fabrication of all our aeration systems here now. By being able to serve all of North America and Mexico from this plant, it has allowed us to be more competitive. We have been able to bring production back to the U.S. in the wastewater treatment industry.”

SSI collaborates with the Dutchess County Boards of Cooperative Educational Services (BOCES) on worker training. “We have hired some talent through that program,” says Chiaverini. “We can train them in our industry in fabrication and sales coordinator roles. Their programs have been helpful in that regard.”

Doreen Tresca, marketing manager at SSI, notes that “we have had tremendous success in organic growth as a company. We want to do that here in the States to be closer to the markets we serve. That helps us reduce our lead times.”

Worker training resources from the state support this growth, she adds. “I would say that the programs have been helpful to us and enabled us to expand. They have helped grow our team. We are excited to be in Dutchess County and be a local manufacturer.”

In nearby Orange County, the world’s largest all-electric-car company is expanding as well. Tesla announced on July 18 that it will occupy 927,000 sq. ft. of space built on spec by Matrix Development Group in the Town of Newburgh. The Austin-based EV maker plans to use the facility as its new regional distribution center for the Northeast. 

Tesla is relocating its North Coast parts distribution facility from Bethlehem, Pennsylvania, to Orange County as part of the move. The firm plans to employ 150 workers initially at the Newburgh plant and eventually ramp up to 300 employees on site.


“If you cannot find the skills, it does not matter what the taxes are.”

—Jack Hergenrother, Vice President of Enterprise Systems and Technology Development, IBM


 Tesla is considered a major win for Orange County, according to local officials. “Tesla is changing the automotive industry in America and abroad,” said Orange County Executive Steven M. Neuhaus. “Having a relationship with Tesla in Orange County can raise income levels for our area and create good jobs. It will also increase competition for our workforce and is another major name in the American economy choosing to come to Orange County.”

Big Deals in Bills Land

Much farther to the north, big investments are coming to Buffalo and Rochester. While the Bills Mafia look forward to watching their beloved Buffalo Bills play in their brand-new stadium soon, they can pause a minute to appreciate capital investment creating new jobs like those at Cimolai, a modern steel fab.

This $56 million investment creates 250 new jobs in Cattaraugus County in the Buffalo-Niagara region. An advanced manufacturing project incentivized by the NYPA ReCharge program, this new Cimolai plant will produce complex steel structures used to build, among other things, large sports stadiums. Cimolai has worked on the new Allegiant Stadium in Las Vegas, home of the Las Vegas Raiders of the NFL, and the Hans Wilsdorf Bridge in Switzerland.

Cimolai purchased an 88-acre site in Olean, New York, and received final approval in January 2023. In addition to the New York Power Authority incentive, the project is receiving financial assistance from the state’s Excelsior Jobs Program and sales tax abatements from the Cattaraugus County Industrial Development Agency. 

Ron Starner
Executive Vice President of Conway, Inc.

Ron Starner

Ron Starner is Executive Vice President of Conway Data, Inc. He has been with Conway Data for 22 years and serves as a writer and editor for both Site Selection and the company's Custom Content publishing division. His Twitter handle is @RonStarner.

  



Site Selection online is a worldwide service of Conway Data, Inc. ©1983-2024, all rights reserved. Data is from many sources and not warranted to be accurate or current. To unsubscribe from our print magazine, contact Julie Clarke. For general inquiries, visit our contact page. For technical inquiries contact the Webmaster.