International SEMATECH will build the center at the State University of New York at Albany and initially employ 250 researchers. The company opened its first center in Austin, Texas, in 1988.
The center will ensure that "New York takes its rightful place as an international leader in high-tech research and economic development," Gov. George Pataki said.
SEMATECH, short for Semiconductor Manufacturing Technology, selected New York after considering sites in Europe, the Pacific Rim and across the United States. It chose New York because of its "financial commitment and human capital," said president and chief executive Bob Helms.
Researchers at the 16,000-square-foot facility, set to open in the fall, will conduct research on extreme ultraviolet lithography, or the development of a new generation of chips with circuit lines smaller than .1 micron, or one-thousandth the width of a human hair, that would store at least 100 times more information than current chips.
George Burns, president of Santa Cruz, Calif.-based Strategic Marketing Associates, which monitors chip developments, thinks Albany is a good choice for the center given the state's emphasis on bioinformatics in Buffalo and photonics in Rochester.
"It could make New York into a Silicon Valley east," Burns said. "The whole area is already full of futuristic technology."
The agreement calls for more than $400 million in state and industry support over the next five years, including $210 million from the state and $193 million from SEMATECH and its member companies.
New York officials hope the state would experience the same economic prosperity as Austin. According to company officials, Austin's population doubled to 1.2 million and gained 100,000 tech-related jobs after SEMATACH located there.
Burns said since the high-tech industry tends to be volatile, upstate New York should diversify its economic base with other types of jobs like financial services so that it won't be hard hit when times are down.
After struggling for the past few years, the semiconductor industry expects worldwide sales to increase 3.1 percent in 2002 and jump 23.2 percent in 2003 fueled by increases in sales of cellular phones and personal computers as well as other digital consumer electronics equipment.
The Semiconductor Industry Association, which represents most U.S. chip makers, has said the market is now in the initial phases of recovery after its most challenging year in history.
Worldwide sales of all chips are expected to total $143 billion in 2002, $177 billion in 2003 and $213 billion -- a 20.9 percent increase -- in 2004. Another slowdown is expected by 2005.
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