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Region Wins in $1.6B IBM Pact

July 16, 2008

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

Jul. 16–ALBANY — A $1.6 billion deal between IBM Corp. and New York state was sealed with a cellphone call made to Lake George on Mother’s Day.

Gov. David Paterson recalled Tuesday during a news conference announcing the wide-ranging nanotechnology project how he talked that Sunday with John Kelly III, IBM’s director of research, who was vacationing on the lake.

The plan, which includes $1.5 billion from IBM and $140 million from the state, is expected to create 1,000 high-tech jobs, including 325 at the University at Albany’s College of Nanoscale Science and Engineering, where IBM is the major tenant with hundreds of millions of dollars in investments in research and development in computer chip manufacturing.

Although Kelly had spotty cellphone reception, the two men talked, and the deal, which was years in the making, eventually got done.

“The impact will be enormous,” Kelly said at Tuesday’s event. “It takes guts to make these types of investments in the future.”

The project, which has three major components, includes a 120,000-square-foot research and development center dedicated to computer chip “packaging,” the process of encasing the chips and their interconnects for use in computers and other electronic devices.

The state is putting up $50 million for the facility, which could eventually employ 675 people.

The site of that packaging center, which will be owned and operated by the NanoCollege, has yet to be determined.

New York state is also giving IBM $65 million to retain 1,400 jobs at the company’s East Fishkill facility in Dutchess County.

“New York is the world leader in nanotechnology, and we’re very proud of it,” Paterson said. “We’re going to play a hot hand.”

Sen. Joseph L. Bruno said Tuesday the deal had “faltered” under the Spitzer administration. Bruno did not hide his displeasure trying to work with the former governor’s administration.

“That’s what they did best was kill deals,” Bruno said. “They were deal killers.”

Although it’s unclear where the new packaging center will be located, Rensselaer Polytechnic Institute in Troy will play an important role at the facility as a research partner. Kelly said that IBM’s $100 million supercomputer at the Rensselaer Technology Park in North Greenbush will be “very synergistic” with the packaging facility.

A NanoCollege spokesman said that RPI is expected to provide computational and design modeling to the center.

Kelly, an RPI graduate, said Robert Hull, an RPI professor and head of the school’s materials science and engineering department, will play a role at the packaging center. An RPI spokesman declined to elaborate.

Hull released a statement saying the “breadth of our faculty’s expertise in materials science, semiconductors and electronic packaging, is a natural fit” for the center.

“We look forward to exploring opportunities for further collaboration with our valued partner,” Hull said.

As computer chip components get smaller and smaller — there are currently one billion transistors on a chip and future designs will allow for as many as 100 billion — packaging the chips becomes more complex and important to performance. That is why the center is so important to IBM’s future here.

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

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Copyright (c) 2008, Albany Times Union, N.Y.

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