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AMD in deal to build chip factory in New York

Nonbinding agreement with state calls for building a $3.2 billion microprocessor plant in Saratoga Springs.

Advanced Micro Devices has entered into a nonbinding agreement with the state of New York that calls for building a $3.2 billion microprocessor plant in Saratoga Springs.

AMD's prospective fabrication plant is tagged for a 200-acre site at the Luther Forest Technology Campus, the chipmaker said on Friday. AMD envisions a 1.2 million square-foot facility, which would likely produce microprocessors based on 32-nanometer manufacturing technology. The company, however, has to first deliver its chips based on 45-nanometer manufacturing technology, which it expects to introduce in mid-2008.

"This is a nonbinding agreement and provides us with flexible planning for now and in the future," said Preston Snuggs, vice president of AMD's manufacturing systems. "We expect to grow year over year...and the products will become more complex year over year, so all that drives the need for more (manufacturing) capacity."

The agreement calls for AMD to begin construction as early as mid-2007, possibly putting the plant online in 2010.

The state of New York has offered to help subsidize the $3.2 billion cost with $1 billion in incentives.

Additional issues played a role in the selection of New York as a fabrication site. AMD has a number of employees working at IBM's facilities in New York, and it is also a partner with the Albany Center for Excellence in Nanotechnology, said Snuggs.

He added that the agreement may be further along in the finalization process by the end of the year.

AMD's announcement comes a day after Intel issued a statement regarding the opening of its 65-nanometer plant in Ireland. The new plant and 65-nanometer technology are expected to help Intel move forward with a new line of multicore goods.