AMD: Ruling Boosts Chip Fab: Company Executive Says EU Antitrust Decision Against Rival Good News for New York

By Larry Rulison, Albany Times Union, N.Y.

Aug. 1–MALTA — Advanced Micro Devices Inc. believes that a recent antitrust ruling handed down by the European Commission against its main rival, Intel Corp., will help bring its $3.2 billion computer chip factory planned for Saratoga County closer to becoming a reality.

On July 27, the EU charged Intel with violating competition laws by abusing its dominant position in the market for microprocessors, the computer chips that power desktop and laptop computers.

Intel controls about 80 percent of the microprocessor market, while AMD has the rest. For years, AMD has charged that Intel has been abusing its standing as the No. 1 computer chip supplier to computer manufacturers.

AMD, based in Sunnyvale, Calif., runs two computer chip factories in Dresden, Germany, and has plans for a third in Malta at Luther Forest Technology Campus.

The state of New York has offered the company $1.2 billion in financial incentives to build the factory, which would employ 1,200 people. The state’s package includes $650 million in cash, although that offer expires in July 2009.

AMD has until then to decide, but it has to weigh its financial position and demand for its products. The company lost $1.2 billion during the first two quarters of the year but has repeatedly said such short-term financial difficulties will not impact its decision.

On Tuesday, AMD’s chief administrative officer, Thomas McCoy, said the EU’s decision — which Intel can rebut — will likely make it easier for AMD to decide to build at Luther Forest. The company believes it will need additional capacity by 2012.

“We are going to grow, and we are going to need that capacity,” McCoy said. “This is good news for our (New York) project.”

McCoy said he believes that if Intel plays fair AMD could command as much as half of the microprocessor market. He also reiterated that the company loves Luther Forest and its proximity to IBM Corp. in East Fishkill. IBM is a research and development partner for AMD, and both have a presence at the University at Albany’s College of Nanoscale Science and Engineering.

“We do not have a Plan B,” McCoy said. “New York is our plan. And it makes very good sense to us.”

Intel vigorously denies any wrongdoing. In a statement released on July 27, the company said that the “microprocessor market is functioning normally and that Intel’s conduct has been lawful, pro-competitive, and beneficial to consumers.”

Larry Rulison can be reached at 454-5504 or by e-mail at lrulison@timesunion.com.

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