GloFo in battle over New York sweeteners

Chipmaker GlobalFoundries is annoyed that the New York State is not giving it the same amount of sweeteners that it gave Intel.

GlobalFoundaries had been seeking a new deal for a second fab similar to the $1.4 billion package promised by the state in 2006 that included both tax breaks and $655 million.

However, talks broke down and one of the arguments was that Intel did not get nearly as much government cash for setting up its plants in Oregon. While Intel had got a fair bit of money from the government, it had invested nearly $20 billion in Oregon since it bought land there in 1974.

GlobalFoundries said it was not fair to compare what it was asking with what sweeteners Intel got in Oregon. Spokesman Travis Bullard told the Times Union  that Intel had been doing business in Oregon since the 1970s and picked up a fair bit of cash from the State over time.

He said that Oregon prices were as cheap as chips while it cost an arm and a leg to set up in New York.

Oregon also had a well developed semiconductor industry and existing infrastructure, while GlobalFoundaries was trying to build its Fab 8 as a ‘green field’ start-up. Building its plant in New York costs a billion more than in areas such as Asia or Europe, Bullard said

It might be that bartering with a company which makes Intel deals look good is giving New York cold feet.  GlobalFoundaries allegedly agreed to pay 100 percent of its local property tax bills in the town of Malta and in Stillwater, where future fabs would be located, but is already involved in a row over the value the council has put on the land.

That could be tied up in court for years. GlobalFoundries has also dumped the pressure on state economic development officials, saying a disagreement could threaten future investment at the site.

To make matters worse, if the company wins,  there are allegations that the local school districts would have to return millions to GlobalFoundaries – because that is where the money has been spent.