Is N.Y. wooing Apple for an upstate chip plant?

Gov. Cuomo is looking to lure high-tech manufacturing to his state

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The Albany Times Union reported that the project will include a 3.2-million-square-foot production facility that is expected to cost $10 billion. Apple isn't likely to build and operate the facility itself. Instead, it's expected to work with a third party focused solely on chip manufacturing, unlike Samsung, which has technology development and production arms as well as its own consumer electronics division.

The consensus is that Apple could tap Taiwan Semiconductor Manufacturing Co. (TSMC) for the job. TSMC currently doesn't have facilities that meet Apple's production needs, which is why the two could be scouting for a new manufacturing plant. Selecting a U.S. site would be good public relations for Apple, which has come under fire for not having enough of its supply chain in America. Samsung currently produces the A-series chips in Austin, Texas, so moving that work to a different U.S. facility wouldn't be as costly as relocating existing pieces of the supply chain to the U.S. from Asia.

Apple has in the past taken an active role in helping suppliers scale up production facilities to meet its needs. The company could be involved in the planning of the new facility for that reason or simply to ensure that it has significant control over the production of current and future processors.

There's been local speculation that Apple might also work with Global Foundries as a supplier at its current facility. While that seems unlikely, the existing facilities can create ARM-based processors, like the A-series, as well as x86 chips like those commonly used in desktop and notebook computers. Global Foundries currently has the ability to expand and add two more fabrication facilities at the site, though it isn't clear if it could produce enough chips for Apple.

While this talk about Apple has been ongoing in state government circles in Albany, there had been no confirmation from officials until last week. But during a radio interview, Cuomo was asked point blank whether Apple might be the secretive company looking for a site. The governor offered up a non-answer that strongly indicated Apple is indeed looking to set up shop in New York.

"Well," he said, "we're shopping a lot of different companies at any given time. Apple has a lot of competition, obviously, for their location. I don't think that they're anywhere yet in the decision-making."

Both of the potential New York sites provide access to important resources, including trained technicians and college graduates with the education and skills required to staff the facilities. It's also a foregone conclusion that New York state and the local officials would offer a series of incentives to lure Apple, or an Apple supplier, to the area. The Luther Forest Technology Campus and Global Foundries have been a boon to Saratoga County, the city of Saratoga Springs and other towns in the area because they attracted a big influx of well-paid engineers and their families.

It's unclear when a formal announcement might take place. Apple did not return phone calls seeking comments about its plans.

Ryan Faas is a freelance writer and technology consultant specializing in Mac and multiplatform network issues. He has been a Computerworld columnist since 2003 and is a frequent contributor to Faas is also the author of iPhone for Work (Apress, 2009). You can find out more about him at and follow him on Twitter (@ryanfaas).

Copyright © 2012 IDG Communications, Inc.

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