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Albany , N.Y. to be high-tech hub | (UPI) -- A consortium of high-tech companies will site its next generation computer chip research center in Albany, N.Y., after the state capital beat out sites in the United States, Europe and the Pacific Rim, Gov. George Pataki announced yesterday.

"This is one of the most exciting days in upstate New York because literally the 21st century will be developed here in Albany, N.Y. -- resulting in thousand so jobs being created," Pataki said.

"This has the potential to be the best thing for upstate New York since the construction of the Erie Canal, and with SEMATECH North here, we have the potential to create an Erie Canal corridor for high tech."

Forty-nine other states and nations from around the globe competed to host the facility, but it is coming to New York where it will transform the upstate economy and bring thousands of high-paying jobs to the capital district, the Hudson Valley and beyond, according to the Republican governor.

SEMATECH North, scheduled to open in the fall of 2002 at the Center of Excellence in Nanoelectronics at the State University of New York at Albany, is expected to hire 250 people right away to do research and development on a new kind of computer chip.

The agreement between New York and the facility's parent group, International SEMATECH, provides for more than $400 million in state and industry support for the next five years -- $210 million from the state and $193 million from International SEMATECH and its member companies.

"SEMATECH North will hire 250 people, I believe it will eventually go up to 500 high tech jobs, so right off the bat, it's having a major impact," said Robert Helms, chief executive officer of International SEMATECH.

Pataki said he would be stunned if numerous high-tech companies did not follow the facility to Albany, providing thousands of new jobs.

The facility will research the construction of computer chips on silicon discs about a foot in diameter, known as 300-millimeter wafers -- the current industry standard is the 200-millimeter wafer.

While individual companies improve on the computer chips, SEMATECH will develop basic standards for the new wafers and ensure that individual company products are compatible.

The research consortium will also help in developing the materials and tools needed to produce the chips.

International SEMATECH, located in Austin, Texas, was opened in 1988 by IBM, Intel, Motorola, Hewlett-Packard, Texas Instruments, Advanced Micro Devices and Agere Systems -- which used to be a part of Lucent -- to increase the U.S. market share of the computer chip industry amid fears Japan could become the dominant force in chip technology.

The Texas state capital also faced stiff competition from 36 communities vying to be home to International SEMATECH. Now, New York officials hope to duplicate the boom it brought to Austin.

In the 14 years since International SEMATECH opened there, more than 200 semiconductor-related companies and more than 450 software-development companies have located in Austin, and high-tech employment has grown to 125,000. Since 1990, the population of the Austin region grew from 600,000 to 1.2 million.

SEMATECH later expanded to include the international companies Philips of the Netherlands, Infineon Technologies of Germany, STMicroelectronics of France, Hynix of Korea and TSMC of Taiwan.

Well-paying jobs and a population increase would be good news for upstate New York, much of which is been in recession for the last 20 years because of the loss of thousands of manufacturing jobs.

Manufacturing employed nearly 30 percent of the work force upstate in 1970 but just 14 percent by 2000. Service jobs increased from 17 percent to 32 percent in that same period but the jobs paid a lot less.

In a report released by the Buffalo branch of the Federal Reserve Bank of New York, 23 percent of those living upstate expected to move within the next two years -- a number that jumped to 33 percent for those in their 20s and 30s.

The largest exodus from upstate New York has been among college educated people in their 20s and 30s searching for well-paying jobs. In the last census, upstate New York lost population in all four cities of Albany, Syracuse, Rochester and Buffalo.

However, SEMATECH may not do for Albany for what it did for Austin. Semiconductor sales are depressed, the stocks of the companies are down and capital to site high-tech companies upstate may not be available.

Making upstate New York a high-tech hub has been on Pataki's agenda since he was elected in 1994 and the state was still suffering from losing 500,000 jobs in the recession of the late 1980s and early 1990s.

In a controversial move, Pataki crafted a generous package of tax credits, financial incentives and property swaps to keep IBM -- based in Armonk, N.Y. -- from leaving the state.

The governor established the Centers of Excellence in Bioinformatics in Buffalo, in Photonics in Rochester, in Environmental Systems in Syracuse and in Information Technology on Long Island -- all expect to get a boost from the high-tech explosion.

IBM is nearing completion of a $2.5 billion computer chip plant, in East Fishkill, in Dutchess County -- located between Poughkeepsie and Albany. It will be the only chip factory in the state and one of handful in the world to make the 300-millimeter wafers.

New York spent $100 million in making the University of Albany campus a center for computer chip research, including early work on 300-millimeter wafers and private industry and the federal government have added an additional $100 million to the center.

Pataki made a public pitch to a meeting of 200 executives from high-tech companies at an industry conference at the Sagamore resort on Lake George, on Sept 10, 2001. He made his personal pitch to Helms as they took a walk along the lake.

The next day, the terrorist attacks occurred, and Pataki's staff took over the negotiations, which were largely held in secret until Thursday's announcement.

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