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IBM to unveil chip plant
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November 17, 1997: 7:02 a.m. ET
N.Y.-based plant to use innovative approach to make chips, report says
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NEW YORK (CNNfn) - IBM Corp., taking a gamble on a new approach in chip manufacturing, reportedly plans to build a new $700-million chip development facility.
The new plant, to be located in East Fishkill, N.Y., will be announced on Monday by IBM Chairman Louis V. Gerstner Jr. and New York Gov. George Pataki, the Wall Street Journal reported.
The investment is considered risky but could provide a lucrative payoff. It will manufacture thumbnail-size memory chips on larger silicon wafers. IBM estimates it can manufacture more units at lower costs using this process.
The 12-inch-wide wafers can hold 2.5 times more chips while only costing 1.7 times more than the current 8-inch-wide format, the newspaper said.
Yet, because the conversion requires a substantial capital expenditure for new equipment, other chipmakers are taking a wait-and-see approach to allow larger companies such as IBM to shake out the bugs.
IBM's facility is expected to create 400 jobs when the plant is fully operational in late 1999.
Separately, IBM also plans to scrap a two-year attempt to sell its old headquarters building in Armonk, N.Y. Rather, the company will spend $10 million to renovate the facility to house its IBM Credit Corp. unit, creating about 500 new jobs.
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