Photo: NY CREATES
The CHIPS and Science Act of 2022 (CHIPS Act) was critically important for halting and reversing the erosion of U.S. semiconductor manufacturing capability and ensuring the security of the domestic chip supply chain. Through a combination of federal grants (up to $39 billion) and tax incentives (in excess of $46 billion), the CHIPS Act has stimulated billions of dollars in private sector investments into U.S.-based semiconductor manufacturing.
The CHIPS Act established the National Semiconductor Technology Center (NSTC), an industry-government-academic collaboration meant to drive advanced semiconductor research, development, and workforce training. In July 2024, the Department of Commerce and the recently created National Center for the Advancement of Semiconductor Technology (Natcast), the nonprofit operator of the NSTC, began the site-selection processes to identify the first three NSTC flagship facilities:
The Commerce Department and Natcast conducted separate site selection processes for each facility. Selection criteria included the presence of a thriving semiconductor ecosystem at the proposed sites, with secondary considerations including chip industry presence; the availability of skilled workers; the number and quality of relevant worker training programs; the number and quality of nearby university research programs focusing on microelectronics; the amount of public and private chip investments in the preceding decade; and the number and type of benefits, incentives, and initiatives aimed at the semiconductor industry.
In July 2024, in a bid by the state to secure the designation of the facility as one or more of the NSTC’s foundational centers, $1 billion was invested into the semiconductor research facility at the New York Center for Research, Economic Advancement, Technology, Engineering, and Science’s (NY CREATES) Albany NanoTech Complex—hereafter referred to as Albany NanoTech.
Indeed, reflecting its unique advantages, in October 2024, the Department of Commerce and Natcast designated Albany NanoTech as the first NSTC research and development facility. Specifically, it will serve as the NSTC’s EUV lithography center, supported by a proposed federal investment of an estimated $825 million. The center is expected to begin initial operations in 2025.
In the following months, the Department of Commerce and Natcast also announced that the Design and Collaboration Facility would be established in California, while the Prototyping and National Advanced Packaging Manufacturing Program (NAPMP) Advanced Packaging Piloting Facility would be established at Arizona State University.
The selection of Albany NanoTech as the site for the NSTC’s EUV lithography R&D center validates New York’s investments in Albany. It was not lost on observers that Albany NanoTech was the first of the three NSTC flagship facility sites designated by the U.S. government, with Silicon Valley coming in second, signaling “a major shift in the center of power in the U.S. computer chip industry.” David Anderson, the president of NY CREATES, observed that the federal action was “a recognition and solidification of the Albany NanoTech center and NY CREATES as a national resource. We really are a gem for this industry and the capabilities that we have here.”
While the perspectives offered by Anderson might be brushed off as the sort of local boosterism commonly associated with site selections for major federal projects, his case for Albany NanoTech is grounded in a number of fundamental realities. While not fully appreciated, especially in Washington, Albany NanoTech stands at the epicenter of a long-standing, thriving semiconductor research and manufacturing ecosystem with few parallels in the United States, or worldwide. Albany NanoTech brings together cutting-edge facilities, actively engaged partners from leading device manufactures and equipment suppliers, collaborative research relationships with leading universities, and a state government already making the significant capital investments needed for such a facility to remain state-of-the-art. Key features of this remarkable institution include the following:
In December 2023, Governor Hochul announced a $10 billion partnership to establish a next-generation semiconductor research and development center at Albany NanoTech—NanoFab Reflection, a research facility owned and operated by the nonprofit NY CREATES. The new center partners with Micron Technology, IBM, Applied Materials, Tokyo Electron, and other major semiconductor firms.
Natcast and the CHIPS Office state with respect to the NSTC EUV center that
Since there are existing entities with EUV lithography capabilities, the facilities model envisions partnering with one of those entities to provide access to this capability for NSTC programs in a prompt and sustainable manner. . . . [We] envision this center to include a full-flow EUV or High Numerical Aperture EUV technology and to be operational in an existing facility by no later than 2026.
The new EUV lithography project is merely the most recent in a long line of major investments by the state of New York and its industrial partners in cutting-edge applied research infrastructure in semiconductor technology at Albany NanoTech. Even before the creation of the NanoFab Reflection lithography facility, Albany NanoTech was “the most advanced research facility of its kind.” Since 2009, it has housed the most advanced nonprofit 300 mm research and development (R&D) facility in the United States, which brings together academic researchers and semiconductor companies so that research can be transformed into commercial products and industrial processes.
Albany NanoTech’s current 300 mm manufacturing line is a wafer fabrication facility that enables companies to refine their manufacturing processes before they invest in their own fabs to produce their chips. Chipmaking equipment companies like ASML, Tokyo Electron, and Applied Materials can use the 300 mm line to test, prove, and gather performance data on their machines. There is no other nonprofit-owned, accessible facility in the United States that can provide these services. Most private companies cannot afford to operate a dedicated research and prototyping center on the scale and with the capabilities of the Albany facility. Even well-equipped research centers such as imec in Belgium and CEA-Leti in France are actively seeking to cooperate with Albany.
In addition to the 300 mm line, NY CREATES’s Albany NanoTech Complex enjoys an extensive array of clean room and other related facilities supporting semiconductor R&D. Since 1995, New York State and chip firms have jointly funded the successive establishment of seven major facilities at Albany NanoTech, building the densest concentration of semiconductor-related public research infrastructure in the world. Already housing 135,000 square feet of Class I 300 mm clean room space, the completion of NanoFab Reflection will boost Albany NanoTech’s total to 185,000 square feet. Only Belgium’s imec, the foremost public semiconductor research center in Europe, has facilities at this scale.
Albany NanoTech is currently the site of an extensive array of public and private semiconductor research collaborations involving many of the leading chip firms in the world. The nonprofit NY CREATES, which owns Albany NanoTech, leases space to industrial tenants who conduct on-site R&D. A major industrial tenant is IBM, which leases more than 70,000 square feet of office and laboratory space.
Onsite projects are typically staffed by a combination of engineers, scientists, and secondees from participating companies, in addition to faculty and students from the adjacent CNSE or from other academic partnering institutions, such as Rensselaer Polytechnic Institute, which also has a growing presence at the site. The projects listed below highlight additional examples of collaboration:
While research collaborations at Albany NanoTech vary, most involve multiple device and equipment firms conducting on-site research utilizing the equipment and facilities owned by NY CREATES. These arrangements enable the sharing of costs and risks involved in identifying problems and hurdles in a precompetitive, genuine manufacturing environment, thus enabling them to be addressed before companies make their own commercial investments. As a team of lithography researchers noted in a 2006 joint paper:
The early learning for the user in developing processes, and the feedback required by the supplier to enable improvements in the equipment technology is critical. But the cost of developing new technology is only going up, along with the risk. The best approach is through a consortium of users, equipment suppliers, universities and government. In an environment where costs and risks are shared, where the possibility exists to provide funding for equipment development and no one company bears the sole financial burden.
NY CREATES traces its origins to a succession of state government initiatives spanning over five decades, in which a series of Republican and Democratic governors and state assembly representatives consistently supported university-based economic development centered on applying science and technology to the development of commercially relevant products and industrial processes. The initial effort was backed by massive and continued public outlays for research infrastructure and curriculum development at the state’s universities, particularly within the SUNY system.
The continuity has been remarkable. As the authors of this white paper noted in their 2020 study, “No governor has fundamentally reversed course or sought to erase the achievements of their predecessors. This policy continuity, often rare in state government, is an important source of the region’s success.” In her 2024 State of the State address, Governor Hochul said that she has “been laser-focused on developing industries of the future like semiconductors across the state.”
Albany NanoTech dates to 1993 when then-Governor Mario Cuomo launched the state-backed Center for Advanced Technology (CAT) at SUNY Albany, which was housed in a new 75,000 square foot facility, the Center for Environmental Sciences and Technology (CESTM). Through a series of major public and private investments aimed at building world-class facilities and acquiring cutting-edge equipment, the CESTM facility expanded in phases, a cadence that has continued to the present day. Governor Hochul’s 2023 announcement of the new lithography initiative, which featured a leading-edge ASML High-NA EUV lithography tool purchased by the state, is merely the most recent manifestation of the state’s ongoing commitment to invest at scale.
NY CREATES is a nonprofit organization that owns and operates the Albany NanoTech Complex, where it is headquartered. Its mission is to “serve as a resource for public-private and academic partnerships” aimed at stimulating innovation and commercialization of technology projects. NY CREATES also facilitates efforts aimed at developing nanoelectronics, advanced analog, and digital technologies.
NY CREATES was formed in 2019 to take over the functions of two earlier nonprofit entities—Fuller Road Management Corporation and Fort Schuyler Management Corporation—that SUNY Polytechnic Institute had used for construction projects at the location and as well as at sites in Buffalo, Syracuse, Rochester, Plattsburgh, and Utica. NY CREATES’s mandate extends to the entire SUNY system, a broader role than either of the predecessor organizations, which were primarily engaged in contract bids and real estate acquisitions.
The original rationale for creating the Fuller Road and Fort Schuyler corporate 501(c)(3) entities under the auspices of the SUNY Research Foundation remains applicable, to a significant degree, to NY CREATES. Potential industrial partners remain more comfortable relying on a nonprofit corporate entity able to be responsive in an industry-relevant timeframe rather than working with an academic institution subject to university rules governing decisionmaking, investments, tenure, seniority, and human resources policies. Faculty members serving Albany NanoTech were employees of the two corporate nonprofit entities and thus not constrained by university rules; the same is true under NY CREATES. This use of foundations able to be responsive to industry needs proved crucial to the success of the Albany enterprise. Without this autonomy, some observers believe the Albany experience “never could have happened.”
The creation of Albany’s Tech Valley has been driven by the engineering and science departments of local universities, particularly SUNY Albany’s College of Nanotechnology, Science, and Engineering (CNSE), Rensselaer Polytechnic Institute (RPI) in Troy, and the unique degree programs offered by Union College in Schenectady. All told, the area around Albany has over 20 colleges and universities offering broad and relevant curricula, characterized by one local educator as:
a rich stew of higher education institutions that offer virtually anything that economic development specialists or corporate relocation specialists look at when they want to locate their plants. . . . We don’t produce wafers for silicon plants, but we produce trained personnel to build those facilities.
The College of Nanotechnology, Science, and Engineering (CNSE) was formed within SUNY Albany in 2004 under the leadership of physics professor Alain Kaloyeros. CNSE operated partially within Albany NanoTech, with faculty and students participating in the complex’s research activities. In a 2010 article, Professor Laura Schulz, a faculty member at CNSE, observed that when CNSE was established:
A new college was formed from the base up. The positions of faculty and staff were not constrained by the traditional academic expectations, but were redefined to maximize technology transfer and economic development. Faculty and staff have been hired to enable the development of ties between companies. . . . Faculty members experienced in industrial research better understand the needs of corporate partners, are able to identify potential collaborators, and can expedite the development of university and industry alliances.
CNSE currently offers curricula relevant to semiconductor technology, artificial intelligence, computer science, nanotechnology (including nanobiology), engineering sciences, and environmental sustainability. Undergraduate, graduate, and PhD programs are offered in nanoscale science and nanoscale engineering. The degree programs are closely tied to CNSE’s R&D projects with industrial partners—most advanced-degree students take part in those projects, some even remaining as post-docs.
In 2014, Kaloyeros persuaded then governor Andrew Cuomo to spin off CNSE and merge it with the Utica-based SUNY Institute of Technology, forming a new entity—SUNY Polytechnic Institute. In 2022, Governor Hochul proposed bringing CNSE back into SUNY Albany and merging it with that institution’s newly formed engineering school. That proposal was implemented in 2023, and SUNY Polytechnic presently operates as a separate entity from CNSE.
Rensselaer Polytechnic Institute (RPI), the oldest degree-conferring engineering school in the English-speaking world, is often characterized as “MIT on the Hudson.” It primarily focuses on providing the best-quality undergraduate engineering training, although during her tenure (1999–2022), President Shirley Ann Jackson dramatically improved graduate programs—as of 2023, four RPI graduate programs in the School of Engineering ranked in the top 30 nationally according to U.S. News and World Report. Her successor at RPI, Martin Schmidt, oversaw the installation of the first IBM Quantum System on a university campus. RPI, along with NY CREATES, IBM, Cornell University, and the University of Albany, also received $40 million to create NORDTECH, a regional Microelectronics Commons Hub funded through the Department of Defense. Over the past two years, RPI has been expanding its faculty specializing in semiconductor-related research and is now offering programs jointly with local chipmakers. Recently, RPI secured approval for a master’s program in semiconductor technology and has refurbished its cleanroom with assistance from the Department of Defense.
Union College, a private college in Schenectady, New York, has embraced what is now known as the “balanced college concept” since 1845; the curriculum exposes undergraduates both to science/engineering and the liberal arts. For generations, this formula has produced leaders in politics, science, and business, including IBM’s John E. Kelly III, a 1976 graduate who was one of the principal architects of Tech Valley.
Community colleges in the Albany area offer curricula relevant to semiconductor manufacturing, targeting the technicians and operators who make up roughly two-thirds of a chip plant’s workforce:
New York’s K–12 schools outperform those of most other states and the schools in the Albany region collectively outperform New York state averages. NY CREATES and its industry and academic partners conduct numerous outreach programs in local schools with the result that most of its incoming freshmen have been coming to the Albany NanoTech Complex “since middle school.”
Albany NanoTech exists in and is an integral part of a technology cluster in the Albany area comprised of mutually supporting semiconductor research, manufacturing, supply chain, and specialized construction firms. The formation of the Tech Valley cluster reflects the long-standing efforts of regional business and economic development organizations to create a center of high-tech industry in a region struggling to reverse economic decline.
Most notably, the Center for Economic Growth (CEG)—formed under the auspices of the Albany-Colonie Chamber of Commerce—functioned as a think tank and advocacy organization supporting high-tech economic growth. CEG’s efforts were strongly supported by National Grid, a local power transmission company with a long-standing commitment to local economic development, as well as local economic development organizations, including the Saratoga County Economic Development Corporation (SEDC). These organizations commissioned technical and environmental studies that helped build popular support for the Global Foundries investment and, in parallel, established a deep technical underpinning for proposals to the semiconductor industry.
The efforts and results achieved by CEG, National Grid, SEDC, and other local business groups are documented in a 2020 book published under the auspices of Georgetown University and supported by a broad range of government and private sponsors. The study, prepared by the authors of this report and entitled Regional Renaissance: How New York’s Capital Region Became a Nanotechnology Powerhouse, describes how local leaders and key members of the state assembly developed a regional approach to economic development that was able to override parochial and competing tendencies of local governments, deploy collective pitches to companies outside the region, and leverage the Albany area’s excellent K–12 schools, universities, and community colleges to attract major corporate levels of investment in semiconductor manufacturing. The accomplishments of the region offer valuable lessons for regional efforts to leverage the CHIPS Act funding.
Today the success of that effort is reflected by the presence in the region of a constellation of semiconductor and semiconductor-related companies. IBM has been a major presence in the Albany area for over half a century and currently conducts much of its semiconductor R&D at Albany NanoTech, where it is joined by TEL, Applied Materials, and now Micron. The complex and the cooperative recruiting effort attracted AMD and what became GlobalFoundries (GF), presently the only major semiconductor foundry in the United States.
Established just north of Albany in Saratoga County, GF began manufacturing operations in 2011–2012. Reflecting its importance within the national ecosystem, in February 2024, the Department of Commerce announced a $1.5 billion award to Global Foundries pursuant to the CHIPS Act to expand and upgrade the company’s manufacturing facilities. In nearby Marcy, Albany NanoTech played a major role in the decision of Wolfspeed, a semiconductor manufacturer, to build a fab in the region. More broadly, GlobalFoundries and Albany NanoTech have attracted numerous chip supply chain firms to the Albany region, demonstrating that the area is already capable of supporting manufacturing and R&D operations. The cooperative initiatives by the leading research centers in Belgium, France, Germany, and Japan underscore the quality and unique advantages of Albany NanoTech’s staff and facilities.
When they launched the NSTC site selection process, the Department of Commerce and Natcast indicated that they would pick the site or sites for the first three foundational facilities “deemed the most advantageous to the objectives of [the CHIPS Act].” In other words, sites will not be picked based on political considerations—far too common in decisions for federal projects. Given today’s global challenges, too much is at stake for politics to dominate capabilities.
Put simply, the Albany NanoTech Complex is a unique national asset, one that can and should serve the objectives of the CHIPS Act specifically and, more generally, the promotion of a more robust national semiconductor ecosystem able to exploit new opportunities and provide a more resilient and secure U.S. economy. Importantly, it offers an exceptional opportunity for the government to leverage existing high-cost resources in an industry-relevant timeframe.
The stakes are very real. As Governor Hochul said when she unveiled the EUV lithography project in 2023, speaking in the tradition of the long line of state governors who laid the foundations for today’s Albany NanoTech,
This is a race for dominance, tech dominance. . . . The U.S. used to dominate this industry. . . . We’re just too dependent on chips and components from places like China, Korea, [and] Taiwan. . . . So, there’s massive implications for national security, technological innovation, economic growth, and independence. And the Chinese in particular are attempting to dominate this industry. . . . We have no intention of letting that happen.
This awareness of the global challenge and the willingness to devote major state resources to meeting it, combined with the existing infrastructure, make New York’s Albany region an exceptional candidate for significant and ongoing support at the federal level. Successful cooperative research organizations are all characterized by sustained and substantial government support as well as active private sector participation. Timely disbursement of existing federal commitments—and proactive approaches to additional investment needs, both at the federal and state level—will be necessary to continue and reinforce the success of the nation’s premier semiconductor research center. The stakes cannot be overstated.
Charles Wessner is a senior adviser (non-resident) with Renewing American Innovation at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Thomas Howell is an international trade attorney specializing in the semiconductor industry and a consultant with CSIS Renewing American Innovation.
This report was made possible through general support to CSIS. No direct sponsorship contributed to this report.
