Building the High-Tech Future by Charles A

building the high-tech future By Charles A. Gargano

early two centuries ago in New York state, the Erie Canal – from n Albany to Buffalo – opened a gateway to the west. Today in New York state, Centers of Excellence – from Albany to Buffalo and beyond – are opening a gateway to the high-technology future. The Erie Canal required men, horses, equipment, and a plan. The Centers of Excellence have required far more, including a vision for high-technology clusters, building new partnerships among universities, government and businesses; and the ability to attract billions of dollars in investments to create jobs and foster growth. State Development. State Empire McGee, New York Photo by Darren Albany, New York’s Center of Excellence in Nanoelectronics. The Centers of Excellence program began in 2001, when New York State Governor George E. Pataki unveiled a strategy so compelling that, in just In addition, the achievement of long-range suc- Charles A. Gargano is a few short years, it has catapulted the state into a cess requires knowledge of industrial growth pat- position as an international leader in high-technol- terns and relies on the involvement of business, chairman of the Empire ogy. The goal was straightforward: establish high- government, and citizens alike. The Centers of State Development tech clusters around the state to support business Excellence program takes this involvement one step Corporation (ESD), and create jobs. As the state’s economic develop- further, incorporating the research and develop- New York state’s eco- ment organization that seeks to create and retain ment capabilities of the state’s universities. nomic development jobs, Empire State Development (ESD) worked to The state established five Centers of Excellence in organization. ESD bring potential partners to the table. It sought to key geographic locations: Albany, Syracuse, join government and private resources with the Rochester, Buffalo, and Long Island. Each one has a encourages economic research strengths of the state’s universities. high-tech specialty. A perfect example of a Center of investment and prosper- Those in the field recognize that successful eco- Excellence’s potential for innovation and production ity in New York state by nomic development involves much more than an is the Center of Excellence in Nanoelectronics, locat- providing the highest inventory of sites with access to water, sewer, and ed in Albany. This state-of-the-art, 300-millimeter transportation. As important as these tangible items computer wafer pilot and prototyping facility repre- level of assistance and are, successful economic development also requires sents the only one of its kind in the world. This service to businesses to an understanding of the intangibles: community unique and elaborate project, which is being devel- aide in the creation or priorities, zoning regulations, government and oped in collaboration with IBM, Sony, Advanced retention of jobs within industry rules, and the marketplace. Micro Devices, Tokyo Electron Limited, and the the Empire State.

NEW YORK STATE’S CENTERS OF EXCELLENCE PROVIDE PLATFORM FOR BUSINESS GROWTH AND JOB CREATION The Centers of Excellence have taken prominence as one of New York state’s signature programs of the past decade. Unveiled by New York State Governor George E. Pataki in 2001, this program has catapulted the state into a position as an international leader in high-technology in just a few short years. Overseen by Empire State Development, the state’s economic development organization, the program’s five high-tech clusters are working to join government and private resources with the research strengths of the state’s universities to develop scientific knowledge, new cures and life-saving medicines, and job opportunities for this generation and the next.

Economic Development Journal / Spring 2006 47 University at Albany is leading the state’s emergence as a leader in the nanoelectronics industry.

CENTER OF EXCELLENCE IN NANOELECTRONICS, ALBANY Albany, the capital of New York state, was selected as the site for nanoelectronics for a number of reasons. The State University at Albany had research capabilities and room on the campus to expand. The Albany area boasts a concentration of colleges and universities, presenting other potential university partners. In addition, Albany is centrally locat-

ed with regard to transportation, access to markets, McGee, NYSESD. Photo by Darren and complementary businesses. For example, IBM, Tour of the Albany Nanoelectronics Center in 2005. a world-leader in information technologies, is a (left to right) New York Governor George E. Pataki, Albany short distance south in the Hudson Valley. Mayor Gerald D. Jennings, Quebec Premier Jean Charest, and Empire State Development Chairman Charles A. Gargano. Nanotech focuses on R&D at the super-small level – beyond what is visible even with a micro- scope. By working with materials at that level, sci- pany is one of only a few in the world that special- entists and engineers are able to control the charac- izes in this type of construction and brings a global teristics of a variety of materials, thereby improving perspective to the rigorous requirements for the performance in a full array of products ranging from physical plant. This German company opted to skin creams to jet engines to computers. establish its East Coast operations near our Albany site, and has proven to be a true strategic partner. The Albany Center in Nanoelectronics is an incredible, spotlessly clean facility that meets the Moving up the vertical line, the first-level user of demands of one of the key components of nano- the chip-fab facility is Honeywell International, electronics – semiconductor wafers, or “chips,” for another company with a worldwide reputation. information processing. At Albany, engineers can Honeywell utilizes the facility to develop and pro- produce the highly advanced 300 mm semiconduc- duce the customized chemicals applied to semicon- tor wafers. Cleanliness is paramount in this process, ductor chips. as even a particle of dust can damage the wafers. The chemicals provided by Honeywell This 450,000-square-foot complex is world-class International are components of the high-tech tools and unmatched at the university level. or systems for semiconductor manufacturing pro- The Albany center was constructed not simply duced by Tokyo Electron Ltd. We were thrilled when for the next generation of devices, but for several this highly regarded Japanese company chose Albany generations beyond that. Capabilities encompass for the site of its only R&D facility outside Japan. system-on-a-chip technologies; biochips, optoelec- The final point on this vertical business model is tronics, and photonics devices; nanoelectronics; the company that defines the projects or uses for the closed-loop sensors for monitoring, detection, and semiconductor chips. IBM, a world-renowned firm protection; and ultra-high-speed communication that has been our partner in nanotechnology since components. The facility provides critical laborato- the onset, has global businesses with a constant ry and clean room space for research, builds incu- demand for semiconductors with a variety of bator space for high-tech company spin-offs, and capabilities. offers a workforce development program. In discussing IBM projects upon committing to We wanted to develop a Center of Excellence that Albany Nanoelectronics, Lou Gerstner, IBM chairman was capable of efficiently transferring high-technol- and CEO, said, “The world of e-business is driving a ogy developments to the marketplace, from concept massive build-out of the infrastructure of computing and to product. As a result, the Albany facility follows a communications. That, in turn, drives demand for criti- vertical business model. Historically, this type of cal technical components like chips. Demand is white- model has been used to advantage by, for example, hot in three critical segments – chips for big servers, the paper manufacturing industry, where a compa- chips to power the explosion in Internet access devices ny owns or operates everything from the forest plot and chips in the networking equipment that ties every- to the paper plant. At Albany Nanoelectronics, we thing together.” have found this same type of vertical integration provides synergy and complementary expertise. ALBANY NANOELECTRONICS: TIMELINE One example of the vertical business model at the FOR SUCCESS Albany center begins at ground level, with M&W The success of Albany Nanoelectronics did not Zander, a construction firm for high-tech semicon- occur overnight. The high-tech Semiconductor ductor facilities, or “chip-fab” specialists. This com- Manufacturing Initiative (Semi-NY) program, New

48 Economic Development Journal / Spring 2006 York state’s comprehensive effort to encourage Marketing and Advertising semiconductor manufacturing in the Empire State, We reached out to the high-technology commu- was the first of many initiatives implemented that nity in a focused effort to communicate our willing- worked to draw industry to New York state over the ness to host high-tech sites. Representatives from course of the last decade, leading up to the unveil- ESD and other local development partners have ing of the Centers of Excellence program in 2001. attended various semiconductor industry trade Early Investments shows including Semicon West in San Francisco, Semicon Southwest in Austin, and Semicon Europa Semi-NY, with its shovel-ready semiconductor in Munich, Germany. We have sent individual rep- fabrication plant sites located across New York resentatives to Asia to discuss opportunities one- state, was established to showcase the state’s com- on-one with potential companies. mitment to the semiconductor industry. We developed marketing brochures, enhanced In November of 1997, Governor Pataki and Lou our website, and provided information on New Gerstner, IBM chairman and CEO, announced the York’s commitment to high-technology in national largest industrial investment in state history to date advertisements in Japanese, Korean, and Chinese – $700 million – to construct the world’s most translations. The Chinese translation targeted advanced, 300mm semiconductor development Taiwan, which is seen as the next hot bed for semi- facility at the Hudson Valley Research Park in East conductor manufacturing. Fishkill, creating 400 new jobs. In addition, IBM pledged to establish a We featured New York state adver- Global Support Center in East tisements in a number of leading Fishkill, creating another 200 jobs. industry publications, including Semiconductor Business News, The following month, the governor Semiconductor International, Solid committed $25 million over a five-year State Technology, Future Fab and period in support of the proposed Electronic News. To develop adver- Focus Center – New York, should tisements and promotions showcas- New York state receive that designa- ing the Semi-NY, we worked closely tion by the Semiconductor Industry with local partners, including the Association. He also committed $10 Dutchess County Economic million in support of the new wing of Development Corporation, West the Center for Environmental Science Seneca Development Corporation, and Technology Management building Cayuga County IDA, Orange to construct a 300 mm pilot manufac- County Partnership, Rochester turing plant at the University at Albany Stony Brook, New York’s Center of Institute of Technology, New York facility. At the same time, Chip Fab Excellence in Wireless and Capital Region Semiconductor ’98, an initiative to pre-qualify a num- Information Technology Initiative, Onondaga County Office ber of sites around the state for the of Economic Development, and Mohawk Valley semiconductor manufacturing industry, was EDGE. launched. ESD matched the local contribution of up to $75,000 to help defray the costs of pre-permitting. Personal Contact In 1998, the University at Albany and Rensselaer Empire State Development’s industry directors Polytechnic Institute were chosen to participate in took on a direct-call marketing effort to personally the prestigious semiconductor industry Focus contact companies in the semiconductor industry. Research Center Program. The focus was cutting- We spoke to more than 320 executives in over 70 edge research on interconnect technologies for a companies around the world. We wanted the com- new generation of more powerful computer chips. panies to know, on the one-on-one level, that New The consortium also included University at Stony York state wanted their business. We retained the Brook, Cornell, MIT, Stanford, and Georgia Tech. services of outside consultants to identify and contact key industry executives, and compare the costs Trained Workforce of building a semiconductor site in New York state We recognized that while we built up our national with other competitors. and international reputation and developed our ESD, in coordination with the New York Capital sites, New York had to have a ready workforce. ESD Region Semiconductor Initiative, also helped spon- and partners worked with seven community col- sor the Chip Fab Hot Link Seminar in 1999 to focus leges to get a SEMATECH-approved Semiconductor on business issues for foundries, non-manufactur- Manufacturing Technician degree program up and ing semiconductor design companies, and running in 1999. This effort helped ensure New Integrated Circuit designers. A number of compa- York has the workforce capacity to fuel the indus- nies, domestic and international, attended the try’s technical labor needs. three-day seminar to discuss the current and future

Economic Development Journal / Spring 2006 49 ment, Planar Semiconductor Inc. (PSI) announced it would invest $20 million to create new jobs at Tech City, Ulster County. Success Breeds Success From an economic development perspective, we applied the philosophy that closing the deal on major investments was the beginning of the partnership. We knew that to ensure success we had to keep our commitments to the businesses that shared our vision. As a result, less than a year after the record- breaking $2.5 billion IBM announcement, Governor Pataki announced with IBM a commitment of $150 million for the Center of Excellence in Nanoelectronics at the University at Albany. IBM Buffalo, New York’s Center of Excellence in Bioinformatics committed to more than $100 million to support the center, and the state pledged up to $50 million. direction of the microelectronics industry. We also The Center of Excellence was envisioned to presented the attendees with a comprehensive become the only university-based 300mm semicon- overview of the positive changes to the business cli- ductor pilot prototyping facility in the world. This mate in New York state and the Semi-NY program. announcement built upon the state’s earlier commitment of nearly $70 million toward micro- and Shovel Ready nanoelectronics for the University of Albany’s By spring 2000, three sites announced they had Center for Environmental Science and Technology completed all aspects of the pre-permitting process Management building. and were “shovel-ready.” Sites were located in the The Center of Excellence provides laboratory and Hudson Valley and Central New York. This gar- clean room space for research, builds incubator nered both in and out-of-state publicity and space for high-tech company spin-offs, and creates Technology Digest-Singapore wrote a full-page article a state-of-the-art workforce development program on our initiatives. to provide the skilled labor critical to attracting A Top-Ten IC Manufacturer Joins microelectronics companies to New York state. Philips Semiconductors purchased IBM’s International SEMATECH and Other Successes MiCRUS Semiconductor facility in East Fishkill in In 2002, International SEMATECH – a consor- New York state’s Hudson Valley in June 2000. tium of the 12 major computer chip manufacturers Philips committed to investing some $100 million in the world – announced it would site its next gen- at the site to increase capacity and production capa- eration 300 mm computer chip research and devel- bilities over the next few years. ESD and the Tax opment center, to be called International SEMA- Department worked diligently with Philips to facil- TECH North, at the Center of Excellence in itate this deal and bring one of the world’s top-ten Nanoelectronics at the University at Albany. IC manufacturers to New York. Since then, Philips has announced about $120 million worth of addi- SEMATECH selected New York after investigat- tional investments in the facility. ing sites in Europe, the Pacific Rim, and across the United States, and it made its decision based on “New York was a great partner to Philips in finding a New York’s leading position in chip research and fab location that meets our needs to increase capacity for development and the state’s business-friendly envi- key markets and customers,” said Stuart McIntosh, ronment. The Albany facility complements the first Philips Semiconductors’ executive vice president and International SEMATECH facility, which is located chief operations officer. in Austin, Texas. The agreement between New York IBM Makes Investment History and International SEMATECH included approxi- Just a few months later in 2000, Governor Pataki mately $400 million in state and industry support and IBM Chairman and CEO Lou Gerstner over five years, consisting of $210 million from the announced that IBM would make the largest pri- state (including $50 million previously announced vate-sector investment in New York state history by for the Center of Excellence at Albany and included building the world’s most technologically advanced in the 2002-03 state budget and $193 million from chip-making plant in East Fishkill, Dutchess International SEMATECH and its member compa- County. This $2.5 billion investment represents the nies, including IBM). largest private-sector investment in the United Just four months after the SEMATECH States since 1995. As a direct result of this invest- announcement, Tokyo Electron Limited (TEL) announced it would establish a $300 million

50 Economic Development Journal / Spring 2006 research and development facility at the Albany Technologies AG of Germany; and Boise, Idaho- Center of Excellence, creating more than 300 jobs. based Micron Technology Inc. The state is contribut- The agreement between New York and TEL including $180 million. More than $200 million is coming ed approximately $300 million in state and indus- from numerous companies that provide the materials try support over a seven-year period. The $100 mil- and equipment used to make semiconductors lion state investment will be primarily for capital In September 2005, the Albany Center of construction, equipment, and specialized tools for Excellence, IBM, and Applied Materials teamed up research. The facility will be used by TEL to per- on a partnership that will make more than $300 form advanced tool design and prototyping for million available for research, development, and future generations of computer chips. economic outreach at the State University of New In 2004, Sony Group announced it would invest York’s Albany Nanoelectronics site, expecting to $325 million in IBM’s state-of-the-art 300mm semi- add over 80 research jobs. conductor manufacturing facility to facilitate pro- At the beginning of 2006, University at Albany’s duction of cutting-edge, next generation 65 College of Nanoscale Science and Engineering was nanometer chips. SONY Group will partner with chosen to be the site of a new nanotechnology IBM’s Systems and Technology Group to produce research consortium, dubbed the Institute for the next generation “Cell” microprocessor at IBM’s Nanoelectronics Discovery and Exploration. The 300 mm chip-fab in East Institute was formed by the Fishkill. Semiconductor Industry The following year, IBM, Association, a Silicon Valley- Albany Nanoelectronics, and based trade group, and ASML, the world’s leading semi- Semiconductor Research conductor lithography supplier, Corp., a North Carolina group pledged to invest over $2 bil- that links companies with uni- lion in separate but related versity researchers. The semiconductor/nanoelectronics University at Albany has been initiatives, thus furthering the designated head of the consor- state’s position as a leading tium, which includes six other semiconductor location. These schools: Rensselaer Polytechnic facilities were slated for Albany Institute, the Massachusetts and the Hudson Valley. Institute of Technology, In a statement that reflects the Harvard University, Yale Syracuse, New York’s Center of Excellence in University, Purdue University, original Centers of Excellence Environmental Systems vision, with university-business- and the Georgia Institute of government partnerships, Martin Technology. The state will be van den Brink, ASML’s executive vice president, contributing $80 million towards the $435 million Marketing and Technology, said, “ As a global leader in project to be housed in a new 100,000-square-foot the semiconductor lithography industry, ASML believes laboratory and clean room annex scheduled to be that it is critical to build R&D alliances in order to sup- complete in 2007. port and continuously improve our products and services Also in January 2006, Albany was named the site as they are introduced into production facilities around of a new SEMATECH Extreme Ultraviolet the world.” Lithography Resist Test Center (EUV-RTC), a one-of- In spring 2005 at the Semicon Europa Conference a-kind research and development center designed to in Munich, Germany, Saratoga Economic provide the global microchip industry with advanced Development Corp. announced the availability of the technology solutions. The new center builds on the 1,350-acre Luther Forest Technology Campus. The partnership, originally announced by the governor in Luther Forest Technology Campus, with substantial July 2002, that SEMATECH established when it backing from the state of New York, has completed selected New York for the location of its International all required environmental reviews and is now zoned SEMATECH North operations. for nanotechnology support enterprises. OTHER CENTERS In July 2005, four of the world’s largest computer chip makers and New York state committed to While the Center of Excellence in spending $600 million over the next five years on a Nanoelectronics has gained worldwide recognition, research, education, and economic development other Centers of Excellence around the state are project focused on creating the next generation of also poised for progress and generating results. computer microchips while limiting costs. The proj- Center of Excellence in Environmental and ect will get $200 million in funding and equipment Energy Systems, Syracuse from Armonk-based IBM Corp.; Sunnyvale, Calif.- Syracuse has a history of excellence in the air based Advanced Micro Devices Inc.; Infineon conditioning industry. The Center of Excellence in

Economic Development Journal / Spring 2006 51 Environmental and Energy Systems was established to build on this expertise. The Syracuse facility focuses on clean and renewable energy, as well as on indoor environments in the areas of air quality, com- fort, lighting, acoustics, and intelligent controls. The Syracuse Center of Excellence is experienc- ing a myriad of partnership successes, such as NuClimate Air Quality Systems, of East Syracuse. In May 2004, NuClimate received a grant through the Syracuse Center of Excellence’s Commercialization Assistance Program (CAP) that allowed the company to test its new product, build prototypes, and begin to establish representation in markets across the United States. Most recently, NuClimate has contracted with the YMCA in Rome, N.Y., for instal- Greater Rochester, New York’s Center of Excellence in Infotonics lation of about 60 units and is working on a proposed project with the Syracuse City School District that would include the installation of about 200 Q mize interdisciplinary collaboration, in three new Air Terminals at the former Central Technical High interconnected buildings on the Buffalo Niagara School. Medical Campus. Center of Excellence in Photonics and The cluster around Buffalo has seen a number of Microsystems, Greater Rochester private high-tech success stories. One company, Rochester has long been known for its optics and SmartPill Corporation, with the support of the cen- imaging industry, so it makes sense to expand on this ter and the University at Buffalo Center for reputation in the Centers of Excellence. The Greater Advanced Technology, has developed the SmartPill, Rochester facility, known as Infotonics, focuses on a medical device that is swallowed, capturing bio- creating technology transfer and pilot fabrication medical data from the gastrointestinal system. The facilities for high-resolution imaging and ultra-fast pill has successfully completed a final round of clin- communications devices that can be shared by part- ical studies for FDA approval. ners to accelerate product development. And, by working with a consortium of compa- The Infotonics Center is making steady progress nies that includes General Electric, Invitrogen, on its economic development mission. Two high- Praxair, Corning, Bristol-Meyers Squibb, and OSI tech spin-off companies were launched by Pharmaceuticals to develop new ways to manufac- Infotonics in November of 2005, including ture individualized biopharmaceuticals, the center SpectralSight, a Canandaigua, N.Y., company devel- is helping to bring individualized medicine closer oping and commercializing hyperspectral imaging to reality. technology – to see what the eye cannot see – in Center of Excellence in Wireless and Information defense, medical, and homeland security applica- Technology, Stony Brook, Long Island tions. Infotonics is also providing critical R&D and prototyping support to six small start-up compa- Long Island’s long tradition of developing high- nies across New York state, including Thermal tech defense and space technologies continues to Gradient, Inc., a Pittsford, N.Y., company that has deliver critical avionics and integrated systems, so developed a device that can amplify DNA much the center was a logical extension of this expertise faster than anything available in the marketplace. in the wireless and information technology arena. The Center of Excellence in Wireless and Center of Excellence in Bioinformatics and Information Technology (CEWIT) is dedicated to Life Sciences, Buffalo making “pervasive wireless computing” a reality, When you think bio-tech, think Buffalo. This with focus areas in networking and communica- center was created to be a hub of life sciences tions, devices, “virtual” and other software systems, expertise in Upstate New York. The center is man- and applications for the two largest sectors of the aged by the University at Buffalo and the state of U.S. economy, health care and transportation, as New York in partnership with Roswell Park Cancer well as the explosively growing field of e- and m- Institute and Hauptman-Woodward Medical commerce. Research Institute. The center and its principal One CEWIT collaborator, LifeTree Technologies, partners are now moving into 400,000 square feet of Great River, is developing online systems to of state-of-art research facilities, designed to opti- reduce the enormous cost of clinical trials for new

52 Economic Development Journal / Spring 2006 drugs, while CEWIT’s research promise has already (2003) as one of the top ten leaders in the nation in attracted eight start-up companies to Stony Brook’s developing nanotechnology as a tool for economic incubators and $15 million in venture investment growth. for CEWIT partners. In another example, Small Times magazine ranked the state of New York second (March 15, ACCOLADES AND HONORS 2005) in the nation for nanotechnology research The growth and success of the Centers of and fourth in overall development of nanotechnol- Excellence, especially with regard to nanoelectron- ogy, adding that the state was attractive to nanotech ics, has gained national and international recogni- companies and investors. tion. For example, the May 2001 edition of Site “New York’s academic and industrial research is giv- Selection Magazine named the 300mm IBM fab as ing California a run for its money,” said Candace one of the “Top 10 Deals of 2000.” The same issue Stuart, Small Times’ editor-in-chief. recognized Empire State Development as one of the “Top 10 Economic Development Groups in the CONCLUSION Country.” The Centers of Excellence have taken promi- Governor Pataki became the first elected public nence as one of New York state’s signature programs official ever to receive the Semiconductor Industry for the past decade. The program was the result of Association’s (SIA) highest honor – the 2003 Robert a clear vision and focused strategies on the part of Noyce Award – in recognition of his exemplary the governor, industry and university leaders, elect- leadership and steadfast support for semiconductor ed officials, and citizens. The partnerships forged research, development, and commercialization in and the developments now in the pipeline are cata- New York state. The prestigious award is named in lysts for business growth, the development of sci- honor of semiconductor industry pioneer and Intel entific knowledge, new cures and life-saving medi- co-founder, Robert Noyce. Governor Pataki was cines, and the growth of job opportunities for this also named by The Forbes/Wolfe Nanotech Report generation and the next.

Economic Development Journal / Spring 2006 53