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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: orson sanderson who wrote (11267)	11/17/1997 7:46:00 AM
From: Darin	Read Replies (1) \| Respond to of 70976

To All, IBM to Build Chip Facility, Won't Sell Old Headquarters By RAJU NARISETTI Staff Reporter of THE WALL STREET JOURNAL NEW YORK -- International Business Machines Corp. will build a $700 million advanced computer-chip development facility in upstate New York, making a hefty but risky bet on next-generation chip manufacturing technologies. Separately, IBM is set to announce it has ended a two-year attempt to sell its old headquarters building in Armonk, N.Y., and instead will spend $10 million to renovate it to house its IBM Credit Corp. unit. The two moves are expected to create about 500 new jobs. The chip investment is expected to be announced Monday by IBM Chairman Louis V. Gerstner Jr. and New York Gov. George Pataki. It could accelerate efforts by other chip makers to move more rapidly to a new technique, in which the thumbnail-size chips are built on disks of silicon 12 inches wide instead of the current eight-inch silicon wafers. Chips form the core of all electronic products. The larger the silicon wafer, the more chips that can fit on it, lowering their production cost. IBM expects the 12-inch wafers to hold 2.5 times more chips while costing only about 1.7 times more than eight-inch wafers, potentially making the company's chip business more productive than rivals. Wait-and-See Position Because the conversion requires expensive new equipment, "a lot of chip companies are taking a wait-and-see position," said Simon Wong, a professor of electrical engineering at Stanford University. "There are always lots of problems when you make a transition of this nature so everybody is hoping somebody will go first and work out all the bugs," said Linley Gwennap, an analyst with MicroDesign Resources, a Sebastopol, Calif., technology analysis company. IBM's "sizable" investment in its new chip development facility shows the computer maker is saying "we are willing to do it and not wait,"" he added. The 12-inch wafer conversion is a major retooling that is expected to cost the entire chip industry more than $15 billion over the next decade. Semiconductor Equipment and Materials International, a Mountain View, Calif., industry group that represents U.S. and Japanese chip makers, expects six different 12-inch trial production lines to start in 1998, with four full-fledged factories starting production in 2000. Analysts estimate that a 12-inch factory could cost up to $2 billion. Create 400 New Jobs IBM's testbed facility, to be located in East Fishkill, N.Y., will have 400 jobs when fully operational in late 1999. Initially, IBM is expected to develop one gigabit DRAMs -- memory chips with the capacity to store a billion bits of data, equivalent to storing about 100,000 typewritten pages. In addition to using its recently developed copper wiring technology to make chips on the 12-inch wafers, IBM plans to upgrade its experimental X-ray lithography equipment to also make memory chips on the bigger wafers. X-ray lithography is seen as one emerging technology that can help continually shrink the size of chips. On top of the 400 jobs, IBM expects to add about 100 new jobs to its credit arm when it moves into its former Armonk headquarters by mid-1998. IBM had put its 33-year-old headquarters up for sale in 1995 and recently moved into a new, Z-shaped headquarters on the same 432-acre site. But IBM didn't receive any bids for the 420,000-square-foot building, which isn't wired for a modern company and will require extensive renovation to house IBM Credit. That unit, which employs about 700, was previously based in Stamford, Conn., but moved to temporary offices in White Plains, N.Y., last year. For its investments and job creation, IBM is getting grants and a sales-tax abatement from the New York state totaling about $21 million, in addition to unspecified local incentives. The incentives come as IBM started implementing hundreds of layoffs and voluntary buyouts in recent weeks. In an interview, Gov. Pataki acknowledged IBM's job cuts but defended the state's incentives to woo the company's investment. "There is competition among states and a very real chance this wouldn't have ended up in New York," he said.