ALBANY, N.Y. – For a second there, New York Gov. George Pataki (R) sounded like he was channeling an old Stevie Wonder classic.
        "The contract for International Sematech North is signed, sealed and delivered, I am proud to say," Pataki said.
        Proud, yes, and perhaps a wee bit relieved. Initially announced in July of 2002 (for more details, see "Upstate New York Gets Nod for Sematech's $403M R&D Center," July 22's Blockbuster Deal of the Week), the International Sematech North (www.sematech.com) project in Albany, N.Y., was hailed by the governor as potentially "the most important economic development for upstate New York since the Erie Canal."
        Finalizing that development, though, took a bit longer than expected. Originally, negotiations finalizing the deal with the international microchip manufacturing consortium were scheduled to be wrapped up by the end of 2002. By then, in fact, Sematech was scheduled to have its first workers on site at the University at Albany's (www.albany.edu) Center of Excellence in Nanoelectronics.
        That date came and went, though, with no ostensible action. Some observers worried about what was up with the Sematech North project, which will create between 300 and 500 jobs with average salaries of $80,000 a year.

International Sematech North will set up shop at the University at Albany's Center of Excellence in Nanoelectronics (pictured).

        Sematech, state and university officials, however, weren't worried, they said as the final agreement was announced. The holdup, they explained, was the longer-than-expected time it took to develop a new University of Albany research program and then secure approval from Sematech's member companies.
        Now, though, everything is a firm go for the project, which will use extreme ultraviolet (EUV) lithography to develop next-generation computer chips that are smaller and more powerful than current chips.
        "Clearly, the state-of-the-art resources of the governor's Center of Excellence in Nanoelectronics have launched a new era for New York and the University of Albany," Albany NanoTech Executive Director Alain Kaloyeros said as the newly inked final pact was announced. (Albany NanoTech is the University of Albany's arm for joint university-industry technology development and commercialization in nanoelectronics, a scientific field centered and manipulating atoms and molecules to create electronic components thousands of times smaller than the sizes current technologies can produce.)

$403 Million Ticketed for Project

The deal sealing the new era in upstate New York provides for $403 million in total investment. Both New York (www.empire.state.ny.us) and Austin, Texas-based Sematech International will provide funding and in-kind services.
        The state is providing $210 million, which includes the $50 million that was previously announced for the Albany Center of Excellence in Nanoelectronics in the state's 2002-03 budget. New York's funding will mostly be for capital construction and equipment for International Sematech North's research, state officials said.

"The technical challenges are indeed daunting," Sematech Chief Operating Officer Betsy Weitzman (pictured) said of collaborating with the University of Albany in using EUV to develop next-generation chips. "To share resources, to share risks is what this is all about."

        International Sematech and its member companies (Agere, Advanced Micro Devices, Hewlett-Packard, IBM, Infineon, Intel, Motorola, Philips, Taiwan Semiconductor and Texas Instruments) will provide $193 million in funding for the Albany project. Most of Sematech's investment, though, won't be in cash, but in intellectual property, according to consortium officials.
        Collaboration with the state is essential in meting out the risks and challenges of EUV technology, Sematech Chief Operating Officer Betsy Weitzman noted at the final agreement's announcement.
        "The technical challenges are indeed daunting," Weitzman said. "To share resources, to share risks is what this is all about."
        The chip market's persistent slump, which began in the late 1990s, has upped pressures for collaboration, industry analysts say. Two International Sematech members – South Korea's Hynix and France's STMicroelectronics, which joined in the late 1990s – withdrew from participation in the research consortium on Dec. 31 of 2002.

EUV Chips on Market by 2007

The contract between Sematech and the University of Albany provides that Sematech will provide technical definition of the EUV work, which will be conducted in the university's 300-mm.-wafer clean-room complex. In addition, the contract stipulates that Sematech will execute and manage the program, including supervising staffing, according to state and consortium officials.
        Sematech and the University of Albany will share in the program's "executive management," and in procurement of equipment and materials, officials said. The two organizations will also share responsibilities for contract R&D work, which Sematech will define.
        Sematech's initial project team will arrive on site in late February or early March, consortium officials said. The first chips using EUV technology will hit the market by 2007, Sematech officials said.
        The final contract comes as New York is facing a state budget deficit of more than $9 billion.
        "To help overcome the tremendous fiscal challenges we face, we will continue moving forward with aggressive tax cuts and smart investments – like International Sematech – that will strengthen our economy and create thousands of good high-tech jobs for New Yorkers," Pataki said at the contract announcement. "Years from now, we will look back on today as an important milestone in New York's transformation into a worldwide powerhouse in high-tech and biotech research, job creation and economic growth."