NYT20020731.0371|NN 2002-07-31|NN 23:38|NN A4917|NN &|CC x1|NN f|SYM ;|: taf-z|JJ u|NN f|SYM BC-IBM-CHIPS-1|NN STLD-WRITE|NNP 07|CD -|- 31|CD 0925|CD BC-IBM-CHIPS-1|NN STLD-WRITETHRU-|NNP (|( TRIM|NNP )|) -|- NYT|NNP IBM|NNP OPENS|NNP $2.5|NN BILLION|NNP CHIP|NNP PLANT|NNP IN|IN UPSTATE|NNP NEW|NNP YORK|NNP (|( SUBS|NNP 1st|CD graf|NN with|IN CORRECTION|NNP .|. No|DT other|JJ changes|NNS .|. )|) By|IN STEVE|NNP LOHR|NNP c.2002|NN New|NNP York|NNP Times|NNP News|NNP Service|NNP EAST|NNP FISHKILL|NNP ,|, N.Y.|NN -|- -|- IBM|NNP opened|VBD a|DT sprawling|VBG and|CC sophisticated|JJ semiconductor|NN factory|NN here|RB on|IN Wednesday|NNP that|DT cost|NN more|JJR than|IN $2.5|NN billion|CD to|TO build|VB and|CC equip|VB ,|, the|DT largest|JJS single|JJ capital|NN investment|NN the|DT company|NN has|VBZ ever|RB made|VBN .|. 

The|DT factory|NN ,|, which|WDT opens|VBZ as|IN the|DT computer|NN chip|NN business|NN is|VBZ in|IN a|DT slump|NN ,|, is|VBZ a|DT costly|JJ and|CC risky|JJ move|NN for|IN IBM|NNP .|. 
But|CC it|PRP is|VBZ also|RB an|DT expression|NN of|IN confidence|NN by|IN the|DT company|NN that|IN it|PRP can|MD remain|VB a|DT technology|NN leader|NN in|IN the|DT highly|RB competitive|JJ global|JJ semiconductor|NN industry|NN ,|, and|CC a|DT commitment|NN that|IN the|DT best|JJS place|NN to|TO execute|VB that|DT strategy|NN is|VBZ in|IN upstate|JJ New|NNP York|NNP .|. 

IBM|NNP is|VBZ an|DT exception|NN among|IN computer|NN makers|NNS in|IN that|IN it|PRP still|RB invests|VBZ heavily|RB in|IN research|NN to|TO advance|VB the|DT design|NN ,|, manufacture|VB and|CC materials|NNS used|VBN in|IN semiconductor|NN chips|NNS .|. 
It|PRP is|VBZ spending|VBG more|JJR than|IN $500|NN million|CD a|DT year|NN on|IN semiconductor|NN research|NN and|CC development|NN .|. 

The|DT factory|NN will|MD produce|VB a|DT wide|JJ range|NN of|IN specialized|JJ semiconductors|NNS used|VBN in|IN everything|NN from|IN the|DT largest|JJS mainframe|NN computers|NNS to|TO cell|NN phones|NNS and|CC video|NN -|- game|NN consoles|VBZ .|. 

The|DT new|JJ plant|NN is|VBZ part|NN of|IN IBM|NNP 's|POS push|NN to|TO gain|VB a|DT strong|JJ lead|NN in|IN chip|NN -|- making|NN beyond|IN the|DT personal|JJ computer|NN business|NN ,|, where|WRB Intel|NNP and|CC East|NNP Asian|JJ chip|NN producers|NNS hold|VBP the|DT advantage|NN .|. 

"|'' The|DT core|NN of|IN our|PRP$ strategy|NN is|VBZ to|TO lead|VB in|IN technology|NN and|CC attack|VB the|DT high|JJ -|- performance|NN segments|NNS of|IN the|DT market|NN ,|, "|'' said|VBD John|NNP Kelly|NNP ,|, senior|JJ vice|NN president|NN in|IN charge|NN of|IN IBM|NNP 's|POS technology|NN group|NN .|. 

An|DT advantage|NN to|TO having|VBG the|DT semiconductor|NN fabricating|VBG factory|NN here|RB ,|, Kelly|NNP explained|VBD ,|, was|VBD that|IN it|PRP was|VBD very|RB close|RB to|TO its|PRP$ research|NN laboratories|NNS in|IN nearby|JJ Westchester|NNP County|NNP ,|, N.Y.|NN To|TO stay|VB ahead|RB in|IN advanced|JJ chip|NN technology|NN ,|, he|PRP said|VBD ,|, moving|VBG innovations|NNS out|IN of|IN the|DT labs|NNS and|CC into|IN the|DT factory|NN as|RB fast|RB as|IN possible|JJ is|VBZ crucial|JJ .|. 

"|'' What|WP we|PRP call|VBP the|DT lab|NN -|- to|TO -|- fab|NN time|NN should|MD be|VB as|IN close|JJ to|TO zero|CD as|IN possible|JJ ,|, "|'' Kelly|NNP said|VBD .|. 
"|'' If|IN our|PRP$ strategy|NN were|VBD anything|NN but|CC to|TO be|VB on|IN the|DT leading|VBG edge|NN ,|, we|PRP 'd|MD have|VB put|VBN the|DT plant|NN in|IN Asia|NNP .|. "|'' 

The|DT new|JJ factory|NN ,|, which|WDT will|MD begin|VB normal|JJ production|NN early|JJ next|JJ year|NN ,|, will|MD employ|VB about|IN 1,000|CD people|NNS .|. 

(|( BEGIN|NNP OPTIONAL|NNP TRIM|NNP )|) In|IN remarks|NNS during|IN a|DT ribbon|NN -|- cutting|NN ceremony|NN here|RB on|IN Wednesday|NNP ,|, Gov.|NN George|NNP E.|NN Pataki|NNP said|VBD he|PRP expected|VBD the|DT facility|NN to|TO generate|VB thousands|NNS more|JJR jobs|NNS in|IN the|DT Hudson|NNP Valley|NNP area|NN for|IN contractors|NNS and|CC suppliers|NNS catering|NN to|TO the|DT factory|NN .|. 
He|PRP praised|VBD IBM|NNP for|IN being|VBG "|'' a|DT critical|JJ partner|NN in|IN our|PRP$ economic|JJ development|NN efforts|NNS "|'' in|IN New|NNP York|NNP state|NN .|. 

In|IN a|DT brief|JJ speech|NN ,|, Samuel|NNP J.|NN Palmisano|NNP ,|, IBM|NNP 's|POS chief|JJ executive|NN ,|, emphasized|VBD that|IN it|PRP was|VBD important|JJ to|TO make|VB long|JJ -|- term|NN investments|NNS despite|IN the|DT current|JJ slump|NN in|IN the|DT technology|NN business|NN .|. 
"|'' To|TO play|VB to|TO win|VB in|IN technology|NN ,|, you|PRP innovate|VB and|CC you|PRP lead|VBP ,|, "|'' he|PRP said|VBD .|. 

But|CC manufacturing|VBG technology|NN products|NNS is|VBZ a|DT costly|JJ and|CC cyclical|JJ business|NN .|. 
In|IN June|NNP ,|, IBM|NNP announced|VBD that|IN it|PRP was|VBD taking|VBG a|DT charge|NN of|IN more|JJR than|IN $2|NN billion|CD against|IN earnings|NNS .|. 
The|DT largest|JJS single|JJ reasons|NNS for|IN the|DT charge|NN were|VBD the|DT cost|NN of|IN getting|VBG out|IN of|IN the|DT business|NN of|IN manufacturing|VBG hard|JJ disks|NNS for|IN storage|NN ,|, which|WDT it|PRP sold|VBD to|TO Hitachi|NNP ,|, and|CC closing|NN down|RP some|DT of|IN its|PRP$ older|JJR semiconductor|NN operations|NNS .|. 

But|CC Kelly|NNP said|VBD the|DT demand|NN for|IN advanced|VBD chips|NNS ,|, like|IN those|DT produced|VBN at|IN IBM|NNP 's|POS facility|NN in|IN Burlington|NNP ,|, Vt|NNP .|. ,|, is|VBZ strong|JJ .|. 
"|'' I|PRP need|VBP more|JJR capacity|NN in|IN that|DT end|NN of|IN the|DT market|NN ,|, "|'' he|PRP said|VBD ,|, "|'' and|CC this|DT is|VBZ factory|NN is|VBZ critical|JJ to|TO meeting|NN that|IN growing|VBG demand|NN .|. "|'' 

If|IN IBM|NNP has|VBZ miscalculated|VBN the|DT demand|NN ,|, it|PRP will|MD suffer|VB badly|RB as|IN both|DT the|DT high|JJ operating|NN costs|NNS and|CC depreciation|NN on|IN the|DT huge|JJ capital|NN investment|NN for|IN the|DT East|NNP Fishkill|NNP factory|NN drag|NN down|RB earnings|NNS .|. 
But|CC industry|NN analysts|NNS said|VBD the|DT plant|NN should|MD be|VB insulated|VBN from|IN a|DT falloff|NN in|IN one|CD or|CC a|DT few|JJ segments|NNS of|IN the|DT semiconductor|NN market|NN .|. 

(|( END|NNP OPTIONAL|NNP TRIM|NNP )|) The|DT factory|NN is|VBZ highly|RB automated|VBN and|CC designed|VBN to|TO shift|VB flexibly|RB to|TO produce|VB many|JJ different|JJ kinds|NNS of|IN chips|NNS to|TO suit|VB demand|NN .|. 
"|'' The|DT diversity|NN is|VBZ the|DT big|JJ difference|NN with|IN this|DT plant|NN ,|, "|'' said|VBD Richard|NNP Doherty|NNP ,|, president|NN of|IN Envisioneering|NNP ,|, a|DT research|NN firm|NN .|. 
"|'' It|PRP gives|VBZ IBM|NNP the|DT capability|NN to|TO make|VB so|RB many|JJ different|JJ kinds|NNS of|IN custom|NN chips|NNS ,|, and|CC the|DT world|NN is|VBZ going|VBG to|TO custom|NN chips|NNS .|. "|'' 

The|DT 140,000|CD -|- square|JJ -|- foot|NN plant|NN is|VBZ a|DT testament|NN to|TO advanced|VBD manufacturing|VBG technology|NN .|. 
The|DT 300|CD -|- millimeter|NN silicon|NN wafers|NNS -|- -|- about|IN the|DT size|NN of|IN a|DT standard|JJ pizza|NN -|- -|- are|VBP shuttled|VBN around|IN the|DT facility|NN in|IN enclosed|VBN plastic|NN pods|NNS ,|, which|WDT ride|VBP on|IN overhead|NN tracks|NNS .|. 
They|PRP drop|VBP down|RB from|IN wires|NNS automatically|RB into|IN machines|NNS ,|, sheathed|JJ in|IN stainless|JJ steel|NN and|CC glass|NN ,|, for|IN each|DT stage|NN of|IN processing|NN and|CC fabrication|NN .|. 

Throughout|IN the|DT 500|CD processing|NN steps|NNS ,|, which|WDT typically|RB last|JJ 20|CD days|NNS ,|, the|DT wafers|NNS are|VBP not|RB touched|VBN by|IN human|JJ hands|NNS .|. 
The|DT circuits|NNS etched|JJ into|IN the|DT chips|NNS are|VBP less|JJR than|IN one|CD thousandth|NN the|DT width|NN of|IN a|DT human|JJ hair|NN .|. 

Human|JJ operators|NNS are|VBP there|EX to|TO monitor|VB the|DT systems|NNS ,|, catch|VB errors|NNS and|CC fine|JJ -|- tune|VB the|DT production|NN process|NN for|IN maximum|NN efficiency|NN .|. 
Because|IN each|DT of|IN the|DT hundreds|NNS of|IN processing|NN machines|NNS is|VBZ self|JJ -|- enclosed|JJ ,|, and|CC essentially|RB airtight|NN ,|, the|DT uniforms|NNS operators|NNS wear|VBP are|VBP less|JJR constricting|VBG than|IN in|IN the|DT previous|JJ generation|NN of|IN chip|NN plants|NNS ,|, which|WDT looked|VBD like|IN space|NN suits|NNS .|. 

The|DT operators|NNS at|IN the|DT East|NNP Fishkill|NNP factory|NN wear|NN light|JJ nylon|NN uniforms|NNS ,|, light|JJ blue|JJ shoe|NN coverings|NNS and|CC translucent|JJ hair|NN nets|NNS made|VBN of|IN paper|NN .|. 
They|PRP look|VBP more|RBR like|IN workers|NNS in|IN a|DT bakery|NN .|. 

Yes|UH ,|, said|VBD Richard|NNP Brilla|NNP ,|, director|NN of|IN the|DT new|JJ facility|NN ,|, "|'' but|CC the|DT donuts|NNS are|VBP a|DT lot|NN more|RBR costly|JJ here|RB .|. "|'' 
Each|DT wafer|NN ,|, holding|VBG hundreds|NNS of|IN chips|NNS ,|, is|VBZ worth|JJ $6,000|NN to|TO $10,000|NN apiece|RB ,|, depending|VBG on|IN what|WP insulation|NN ,|, circuitry|NN and|CC materials|NNS are|VBP used|VBN .|. 

NYT-07|NN -|- 31|CD -|- 02|CD 2338|CD EDT|NNP 