GlobalFoundries has invested $2 billion this year alone in its sprawling Fab 8 micro-chip manufacturing facility in Malta, New York.
By comparison, the company has invested less than 3 percent of that amount - $55 million - in a recently completed project at its plant in Essex Junction.
But at a company event in Malta this week a GlobalFoundries executive said the Vermont plant plays a critical role in the company’s sustainability.
Company Senior Vice-President Thomas Caulfield, who is general manager of the Malta facility, touted a major expansion there and the new technology employed at the three year old plant.
Caulfield also gave an overview of the company and described the role of the decades-old Essex Junction plant.
He said the investment in research and development necessary to support the manufacturing wouldn’t have been possible without the acquisition of the IBM plants in Essex Junction and East Fishkill, New York.
“If you want to be in this semiconductor game and do leading edge technology, you’re spending more than a billion dollars a year in R&D [Research and Development],” said Caulfield.
Without the growth provided by the IBM acquisition, he said, GlobalFoundries would not have the 'scale' to make that investment.
As he has in the past, Caulfield explained that the IBM acquisition also provided the company with a broader portfolio of products, more customers and additional intellectual property.
The acquisition also helped solidify what GlobalFoundries calls a Northeast Tech Corridor stretching more than 200 miles from Burlington through Malta to Fishkill.
He says because of the concentration of manufacturers in the corridor, some support businesses are building facilities nearby to shorten supply lines.
Caulfield gave the example of an Austin, Texas company building a new hydrogen peroxide manufacturing facility in the area, “because it costs a fortune to truck hydrogen peroxide from Austin. ” Hydrogen peroxide is used in chip manufacturing.
“Once you have the economic scale, it helps the supply chain relocate. It lowers our costs, it lowers their costs,” he said.
Caulfield says despite the growth and investment in new technologies in Malta, there is growth in older technologies like those employed in Essex Junction where the company this year invested $55 million to increase production of radio frequency or RF chips used in mobile phones and tablets.
“Burlington had to reinvent themselves and over the course of their journey became the best at RF. Everybody on the planet that needs to do something that connects to a radio – mobile device – needs to use their product. They are the market leader, ” he said.
Under IBM, the Essex Junction plant manufactured chips for the aerospace and defense industries and Caulfield said there’s been no loss of that work under GlobalFoundries.
The plant is the only one in GlobalFoundries network where the “trusted foundry” work is done.
GlobalFoundries is a privately held company owned by the emirate of Abu Dhabi. It employs 18,000 worldwide.
After a series of company-wide layoffs and buyouts last month, including a reduction of more than 100 positions at the plant in Essex Junction, Caulfield says business is leveling out.
He said a single contract can trigger a downturn for the company – a problem that it's addressing by increasing the diversity of products and customers.
“Sometimes you find yourself in a situation where you have high customer concentration and if one of your clients has a disproportionate amount of business difficulty, it can impact guys like us and it has,” he said.
Despite the workforce changes, the company says it actually employees 500 more people in Malta now than at the beginning of the year. In Essex Junction, the number remains at about 3,000.
Caulfield says Fishkill, which was IBM’s largest and most advanced chip manufacturing facility, will see the migration of hundreds of research and development jobs to the GlobalFoundries Fab 8 location.
“In the past Fishkill was the R&D epicenter for IBM. Now Malta is,” said Caulfield.
He said in the future the Fishkill plant will revert to a largely manufacturing facility.
“It will do what Burlington did. It will reinvent itself,” he said.
Caulfield said no similar job migration is anticipated at the Vermont plant.