The promise was huge. The project is even bigger.
When the computer chip manufacturing plant in Saratoga County was first announced in 2006, it was expected to be a $3.2 billion project.
Eight years and nearly 10 million man hours later, GlobalFoundries is finishing what’s turned into an $8.5 billion plant and research center. At one point, it was the fifth-largest construction project in the nation. It has strengthened the region’s ties to the global economy, and almost single-handedly pulled the local manufacturing and construction industries out of the recession.
Just compare GlobalFoundries to one of the most expensive, high-profile construction projects in the state: The replacement of the Tappan Zee Bridge in Tarrytown, which crosses the Hudson River at one of its widest points. By the time it finishes, GlobalFoundries will be a 3.5 million-square-foot project. That’s nearly 20 percent larger than the 2.9 million-square-foot bridge project. Then there’s the $8.5 billion pricetag for GlobalFoundries, versus $3.9 billion for what’s being called the New New York Bridge.
And there’s more to come.
Construction of the plant began in 2009 and is anticipated to be completed this year, though GlobalFoundries has plans to add further facilities if demand warrants.
Demand has already been higher than expected. When the plant was first announced, the smartphone of choice was the BlackBerry; the first iPhone wouldn’t come out for a year.
Since then, the need for computer chips has exploded, in large part because of the explosion in mobile devices (tablets hadn’t even reached the market in 2006). All these forces are leading GlobalFoundries to expand.
The growth is evident by the sea of cars that surrounds the Malta plant, which averages about 6,400 people on site each day, including with 2,400 employees. It can be a 30- to 40-minute wait to get into the parking lot, and if you’re last in, you could face a half-mile walk to the door.
Depending on what’s being done, between 2,000 and 5,000 construction workers arrive daily at the GlobalFoundries site, tucked away in the Luther Forest Technology Campus. Half are from out of town, a quarter are from out of state, their license plates reading New Jersey, Vermont, Nevada and Virginia.
During the recession, while others were cutting jobs, GlobalFoundries was hiring. The impact of the project can be seen in the number of jobs in both the manufacturing and construction sectors.
Manufacturing jobs in the Albany metro fell to a low of 20,300 in 2010, according to state Department of Labor data. Construction jobs — the state includes these in a category with natural resources and mining -- fell to 16,500 that year.
Manufacturing added 4,100 jobs between 2010 and May 2014, the most recent data available. Construction has added 4,000 jobs in that time.
The building of the Malta plant has created approximately 2,200 direct new construction jobs, and supported more than 10,000 indirect jobs in the economy, according to research by the Semiconductor Industry Association.
Pete Rozell, co-owner of Rozell Industries Inc., a construction company based in Queensbury that does rigging and crane work, has been in the business for 32 years and has done work on everything from paper mills to all sorts of manufacturing plants. Before 2009, he hadn’t worked on anything as big as the GlobalFoundries chip fab.
"I don’t think anybody local has worked on anything that big, not a billion dollar project,” Rozell said. His company has approximately 40 workers at the site, and it’s been a big boost to volume and profits, Rozell said.
How much exactly? “I don’t know, I just put multi-millions,” he said chuckling. “Everybody in the area is hoping that GlobalFoundries succeeds and expands, because it’s more business for everybody,” Rozell said.
GlobalFoundries moved in to the Malta facility in 2011. Before the first manufacturing space known as Fab 8 was completed, the company forecasted that it would need more space. Current projects include finishing a 90,000-square-foot expansion on the fab, and the addition of a 560,000-square-foot Technology Development Center, where new research and development will take place.
“As we start to fill up the capacity of 8.1, hopefully the demand will be high enough to have 8.2,” said Travis Bullard, GlobalFoundries spokesman. “A lot of energy is in forecasting.”
It already has permits to build a second facility. If that happened, it could be an approximate $15 billion investment that would take up to two years to complete.
Forecasting is based on what the overall market is expected to do, what clients will want and what potential customers will want, said Jim McGregor, founder and principal analyst of TIRIAS Research, an Arizona research and advisory firm.
If the forecast is miscalculated, it can mean an oversupply, reducing the products’ worth, or an undersupply, and clients will go to a business that is producing the needed amount.
“You’re talking six years out minimum that you’re trying to forecast. That’s not an easy task,” McGregor said. “The semiconductor industry goes through more pendulum swings because of this.
“I think they are on track with where they need to go,” McGregor said. “They’re continuing to invest, but they’re not trying to overinvest.”
The majority of the costs are for manufacturing equipment -- the construction is only making up about $1.5 billion of the project.
A piece of equipment called a lithography stepper, which creates millions of microscopic circuit elements on the surface of the silicon chips, tends to run about $50 million.
From the water to electricity needed, the projects take a tremendous amount of planning, McGregor said. “This is almost like building a small city.”
It even works like a city, with a community of contracting trailers on site, each with its own mailing address.
That’s where Gerald Goff, GlobalFoundries director of site construction and infrastructure, comes in. From the point of conception to the time when the first chip is made, Goff designs, organizes and runs the operations.
Goff has been with the company for 27 years, before it spun off from Advanced Micro Devices, and has directed construction of plants in Germany, Texas and Japan. The Malta plant has been the largest he’s worked on because the two projects -- the construction of both the plant and the R&D center -- are happening simultaneously, he said. “If you look across the U.S., I don’t think you’ll see another company in our industry that has taken on two simultaneous projects of this magnitude.”
Managing it all takes good people, he said. Goff has a management team of six GlobalFoundries employees and 55 contractors that help him manage all the workers on campus.
The growth hasn’t come without growing pains.
As the manufacturer looks to add between 400 and 600 employees by the end of the year (taking it to 2,800), it recently had so many candidates coming in for interviews that office space had to be converted into interview space.
Another parking area recently was cleared to allow for another 1,000 parking spaces for the construction crews’ vehicles.
The economic impact, meanwhile, doesn’t stop at the facility’s gates. The impact is felt town-, county- and state-wide, from the cost of the materials to the dollars workers are spending in the county.
The county’s portion of sales tax collections is expected to increase to $110 million this year, up from $104.5 million last year, said county Administrator Spencer Hellwig, with GlobalFoundries responsible for $6 million to $7 million of that.
The Hyatt Place hotel in Malta has 120 rooms, and on any given day about 65 are booked by GlobalFoundries employees, suppliers or construction workers, said Jason Tyler, hotel food and beverage coordinator. “They do make up a large portion of our business revenue,” he said. Revenue totals were not available.
GlobalFoundries has connected even small upstate New York businesses to the global economy.
Working at the Malta Diner on Route 9, Stefanie Gouvis has met people from “all over the place,” she said, including China and the United Kingdom.
Nearly a quarter of the 70 to 100 people who come to the diner for lunch each day are from GlobalFoundries, said Gouvis, whose family owns the 21-year-old business. Every time the family hears about GlobalFoundries adding a new fab or addition,they get excited, she said. "It’s been great."