AMD - Financial impact

The Foundry Co. is the offshoot of the union of Advanced Micro Devices and Advanced Technologies Investment Corporation and will be built in Luther Forest Technology Park with construction beginning in 2009. According to an economic impact study by Everett M. Ehrlich, President of ESC Company, the semiconductor industry “not only provides well-paying jobs, it also serves as a catalyst that has transformed regions into technology industry ‘clusters’ that generate extra jobs, investment and economic diversity.”

In the United States, the semiconductor industry is the second largest net exporter in the manufacturing economy behind the aircraft industry. In 2006, the U.S. semiconductor exports totaled $52.4 billion and produced a trade surplus of $25 billion, according to the study.

According to Joe Dalton, President of the Saratoga County Chamber of Commerce, the impact of The Foundry Co. will be huge.

“The building won’t be finished for about three years, but there will be an immediate impact with construction jobs for the site and new housing developments in the area,” he said. “AMD chose Saratoga County because we have the best technology park in North America—the best sewer, water and electricity systems—and other companies will want to come see what Luther Forest has to offer also.”

According to Ehrlich’s study, the indirect impact of the facility, including the creation of jobs that support the manufacturing workers and families, will be approximately 2.25 to 6 new “indirect” jobs for every one job created at The Foundry Company. These jobs can include retail establishments, health services, education, home maintenance and repair and personal consumption. The Foundry Co. is expected to open 1,465 jobs. With the addition of the indirect jobs, the total number of new jobs in the area could reach 4,500 with an annual payroll of $180 million for all of the jobs added to New York State’s economy.

Stemming from Dalton’s comment about other companies gravitating toward Luther Forest, the study states that “suppliers, skilled workers, investors, and other groups associated with the industry will locate near semiconductor companies for obvious reasons. This improves the economic fertility of the region and, in turn, produces a virtuous cycle of growth.”

These groups could include computer sales, maintenance, fab garment cleaning, delivery services, security, waste disposal and other on-site activities. The annual payroll for these jobs would be about $22 million.

As for real estate, Miguel Berger of Tech Valley Homes Real Estate said he believes The Foundry Company will help to boost the market.

“We expect about 1,000 new families who will be looking to buy or rent a home. This could create an urgency in the market, so this will absolutely help out the market,” Berger said.

Berger said the average price of a home in the Capital Region is about $210,000. With 1,000 new homes to build, that’s $210 million added to the housing market.

“The Foundry will help not only the housing market, but all markets. It shows a lot about this area that they decided to bring the company here. It can only mean good things for the region,” Berger said.