Thursday, May 10, 2007

The trouble with mercenaries

The trouble with mercenaries is that they can be bought. For example, the state of Texas bribed fair and square - errr, gave $40M and lots of tax incentives - to International Sematech, the big consortium of semiconductor manufacturers, in 2004 in exchange for them staying in Austin. That worked out really well for all concerned: today Sematech announced that they're picking up and moving to Albany because New York offered them more money. If I was Gov. Perry, I'd be pretty annoyed.
Update: Some Sematech people came to Rice yesterday and were grilled a bit about this. They say that the New York business is a parallel operation and won't affect their Texas activities; they also said that the reporting on this was pretty awful. Interesting. I guess time will tell about how much the focus of their work shifts to Albany. Given that the state of NY put over $3B into that setup, it seems like Texas will either have to do something similar, or face a possible eventual slide into secondary status.

7 comments:

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Anonymous said...

Don't blame the mercenaries, blame the politician (more). If a competent group had drawn up the agreement, there would be proper penalties for this sort of thing.

But, it must be a tough thing to do, because you'd think it would work for say... road construction, too, but the best bid always ends up late and overbudget in any case.

Doug Natelson said...

The thing that amazes me is that apparently it makes business sense to Sematech to do this. New York isn't exactly a low tax environment, and while Albany is cheaper than NYC, it's still pretty darned expensive to operate a business there. Texas, conversely, has a much looser tax code and is generally incredibly friendly to businesses (note that this has downsides, especially when it comes to issues like environmental regulations).

Stupac2 said...

Hi, my name is Stuart Coleman from Daily Irreverence, and in a couple of weeks I'll be hosting Philosophia Naturalis, the Physics/Math blog carnival. It's not very well-known, and it would be great if you could help me out by asking your readers or other physics bloggers you know to contribute posts, or by contributing yourself. If you'd like to nominate something, just e-mail me at stupac2 at gmail dot com (and feel free to post my e-mail /my blog address if you do ask for submissions).

Thanks!

gs said...

According to the Newsday link (and the update to the post), Sematech already had a significant presence in NY state:

More than 1,600 scientists, researchers and other staff work at Sematech's Albany facility, a $3.5 billion, 450,000-square foot complex.

Nevertheless, I can't help noticing that the Republicans lost control of Congress in the last election. We have an unpopular Republican president from Texas, and the Democratic frontrunner for 2008 just happens to represent New York.

Alison Chaiken said...

New York has been quite aggressive in trying to attract high-tech firms "upstate" in the last few years. NY state paid a CIGS-based solar startup to move from Silicon Valley to upstate a few years ago. And there's a DARPA-funded flexible electronics center in Binghamton. With the relocation of Sematech to upstate and the not-too-distant presence of Veeco HQ in Woodbury, NY may be close to a critical mass. Having tech powerhouse Cornell nearby won't hurt at all either.