New York Plans to Invest $1 Billion to Expand Chip Research

Gov. Kathy Hochul of New York is expected to announce on Monday a plan to invest $1 billion to expand chip research activities in Albany, N.Y., as the state aims to continue as a global semiconductor center.

The plan is expected to create 700 new permanent jobs and retain thousands more, and includes the purchase of new version of one of the world’s most expensive and sophisticated manufacturing machines, along with constructing a new building to house it.

The initiative should draw $9 billion in additional investments from chip-related companies, according to state officials. They expect it to boost New York’s chances to be selected to host a new National Semiconductor Technology Center, a planned centerpiece of the research portion of federal money that Congress allocated in 2022 as part of the CHIPS Act.

“We’re hoping that this level of investment will attract more investment from the U.S. CHIPS Act to make it even bigger,” said Mukesh Khare, an IBM vice president who is general manager of its semiconductor operations.

Besides IBM, which has long conducted chip research in Albany, companies participating in the project include Micron Technology, Applied Materials and Tokyo Electron.

The focus of the effort is the Albany Nanotech Complex, a cluster of research buildings affiliated with the State University of New York at Albany. The state plans to spend about $500 million to build a new 50,000-square-foot clean room building.

A different building is needed to accommodate the next major advance in a technology called lithography, which projects patterns of circuitry on silicon wafers to make chips. Advances in such equipment are needed to create smaller transistors and other circuitry to boost the power of computers and other devices.

The most sophisticated chips are currently made using technology called extreme ultraviolet, or EUV, lithography. The Dutch company ASML is the dominant supplier of the machines, which officials in the United States and the Netherlands have prevented from being sold to China as part of an effort to limit that country’s progress in chip manufacturing.

Albany Nanotech has owned prototype EUV tools and currently operates a commercial version. Under the new plan, New York will invest $500 million to purchase a next-generation EUV system — known by the phrase “High NA,” for numerical aperture — that will allow the center to develop much more advanced chips.

Besides permanent research jobs, state officials estimated that the Albany project would generate 500 to 600 temporary construction jobs over roughly two years.

Albany NanoTech won’t be the first to use the High NA tool. Intel has ordered the first system from ASML, which is expected to begin installing it in early 2024. The comparable machine is expected to arrive in Albany in late 2025, Mr. Khare said.

The effort is unusual in several ways, including that the new machine will be owned by the state and operated as a public resource to help the broader U.S. semiconductor industry, he added.

States in the Northeast United States seem destined to play a big role in the chip industry’s evolution. U.S. Commerce Department officials also said Monday that BAE Systems in New Hampshire will receive the first grant under the manufacturing portion of the CHIPS Act.

Micron, a Boise, Idaho, company that is the only American maker of chips used to store data, has also said it will spend up to $100 billion over a decade or more to develop a new manufacturing site near Syracuse, N.Y.

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