Sematech indicates it plans to stay

With funds approved, fight with New York over chip consortium may be over

By Kirk Ladendorf
Wednesday, June 4, 2003

International Sematech said Tuesday that it probably will remain in Austin now that the Texas Legislature has backed Gov. Rick Perry's plan to help expand the research consortium's chip-research program.

"The governor said he would work with the Legislature, and he has done that," Sematech spokeswoman Anne Englander said. "We assume the commitments will be filled. Given that, I don't see why our board would want to relocate."

In a letter of Sematech's board last fall, Perry pledged to seek $200 million in state and local funds over five years to support the consortium's research.

The Sematech board is expected to decide in August on whether the consortium will stay in Austin or move to Albany, N.Y. The consortium employs 500 people at its research center on Montopolis Drive in Southeast Austin.

The Legislature created the Texas Enterprise Fund on Sunday with $295 million from the state's rainy day fund. About $40 million of that fund had been earmarked as the first installment of a state commitment to support Sematech's research.

Under Perry's proposal, the state money would support the creation of an advanced materials research center that would be managed by Sematech but would have participation by researchers at various universities in Texas.

The consortium, which chose Austin as its headquarters in 1988, is the best-known collaborative organization involved in finding improved methods, materials and equipment for making future generations of microchips.

New York Gov. George Pataki has offered to provide substantial research help to Sematech if it would relocate to a research park in Albany. Sematech agreed last year to relocate one of its research programs to New York in exchange for $160 million in research assistance over five years.

Sematech, which has a $150 million yearly research budget, is looking for ways to stretch its research dollars to cover more of the technical challenges involving advanced chip manufacturing. The consortium has said it wants to expand its research programs to do more work investigating new materials that could be used to create advanced chips.

Research assistance from the state is one part of an incentives package that Sematech supporters have said they will seek. Supporters also are attempting to find federal funds to build a new research facility in Austin that could be used by Sematech.

Members of the state's congressional delegation have indicated that they will support that effort.; 445-3622