Detailed Austin economic data.

[the Genral]

Well at least Cryer is sympathetic...I feel better now.

[Austinite]

Originally Posted by Scottolini

Spokesman Bill Cryer said the move represents a substantial commitment by the parent company, Samsung Electronics Co., the world's second-largest chipmaker, to keep advanced semiconductor manufacturing in Austin well into the future.

The expanded plant will be the largest chipmaking plant in North America and will bring Samsung's total investment in Austin to $4 billion since it opened its first plant in 1997. "The significance to Austin is hard to overestimate," Cryer said. "This gives the local semiconductor manufacturing industry another 10 to 20 years of additional life. We are going to bring in the latest technology in semiconductor manufacturing and put it in Austin.

Cryer said the jobs that will be cut are lower-skilled equipment operator positions. Almost all of the new jobs will be higher-level, and higher-paid, technical and engineering positions.
Austin-area business leaders said the project is overall encouraging news for the area's economy, which has lost thousands of high-tech manufacturing jobs in the past year.

"I am sympathetic to the situation of workers who will lose their jobs, but this has to be a pretty positive statement in the face of what the economy has done to the semiconductor industry," said Austin lawyer Pike Powers, who played a leading role in recruiting both Samsung factories to Austin.
Powers said it is important for Austin to have a state-of-the-art chip factory, because it opens the possibility of further investments in the future.

"It gives you something to work from versus having nothing to work from," he said. "Give me some cards in the game, and we can play. But if you don't have a seat at the table, you won't be in the game."
Mayor Lee Leffingwell said he welcomed the new investment and the jobs the project would create, saying the project would help keep Austin competitive and maintain its status "as a leader in the semiconductor industry."

The project also will generate more business for materials and equipment suppliers.
Mike Rollins, president of the Greater Austin Chamber of Commerce, said an economic impact analysis his organization commissioned concluded that the project would add $1.3 billion to the Austin-area economy and create more than 5,000 spinoff jobs.
Cryer said the project also would generate business for suppliers and equipment manufacturers.

Fab 2 already is the biggest and most advanced chip plant in Austin. It makes NAND flash memory chips, the type used in smart phones, digital cameras and other consumer electronics. Samsung Electronics is a major supplier of flash memory for Apple Inc.

Fab 1 is already old by chip industry standards and uses an almost obsolete technology to make computer memory chips from silicon wafers that are 8 inches in diameter. Fab 2 uses 12-inch wafers, a much more efficient method that puts more chips on each wafer.
With the conversion, Samsung also will be able to use an advanced process that deposits copper on the silicon wafers, which produces higher-performance chips.

"In order to upgrade and convert the older facility, we must take the manufacturing area back to the bare walls," said Y.B. Koh, president of Samsung's Austin subsidiary.

The new project "is terrific news for Austin given the alternative, which was closing the older fab and not expanding Fab 2. What should be extremely valuable to Austin is the fact that we have a corporate citizen in Samsung that is a very long-term player," he said.
kladendorf@statesman.com; 445-3622





http://www.statesman.com/business/co...15samsung.html

Yes, it sucks less than losing both plans would.

[Scottolini]

Facts be damned!

[Austinite]

Originally Posted by Scottolini

Facts be damned!

Reread the article you posted. The people quoted in it have exactly the same take on this that I do: That it's better than it would've been if both plants had closed. Presumably, they think that because, although a) Austin will lose hundreds of jobs and all of the spin-off jobs and commerce associated with the closed plant, b) there will be reinvestment in the existing plant and the creation of new jobs that will partially replace the ones previously lost.

[Scottolini]

Really?

Mayor Lee Leffingwell said he welcomed the new investment and the jobs the project would create, saying the project would help keep Austin competitive and maintain its status "as a leader in the semiconductor industry."
The project also will generate more business for materials and equipment suppliers.
Mike Rollins, president of the Greater Austin Chamber of Commerce, said an economic impact analysis his organization commissioned concluded that the project would add $1.3 billion to the Austin-area economy and create more than 5,000 spinoff jobs.
Cryer said the project also would generate business for suppliers and equipment manufacturers.

This sounds like a major gain.

I could continue repeating the same facts I've already said a few times, but it seems you want to focus on the short term job loss as the be all end all of whether this is good or bad. Go ahead and partake in your misplaced pessimism if you wish.

[Austinite]

Originally Posted by Scottolini

Really?

Mayor Lee Leffingwell said he welcomed the new investment and the jobs the project would create, saying the project would help keep Austin competitive and maintain its status "as a leader in the semiconductor industry."
The project also will generate more business for materials and equipment suppliers.
Mike Rollins, president of the Greater Austin Chamber of Commerce, said an economic impact analysis his organization commissioned concluded that the project would add $1.3 billion to the Austin-area economy and create more than 5,000 spinoff jobs.
Cryer said the project also would generate business for suppliers and equipment manufacturers.

This sounds like a major gain.

I could continue repeating the same facts I've already said a few times, but it seems you want to focus on the short term job loss as the be all end all of whether this is good or bad. Go ahead and partake in your misplaced pessimism if you wish.

So it would add $1.3b to the economy and create more than 5,000 spin-off jobs. Assuming that's correct, it's correct in the same way that it would be correct to say that the reinvestment would create 150-200 jobs. Which is to say that it's very misleading. In other words, you have to consider the time-frame over which that $1.3b would be created: it would almost certainly be very long term indeed (probably over the life of the plant). Then you have to consider what portion of that $1.3b would be attributable to the new investment as opposed to the existing saved plant: the figure would almost certainly be for the entire renovated plant. Then you have to compare the amount of money that would be generated by the lost and saved plants and compare it to the renovated plant, keeping in mind the amount of money that will be lost during the period covering the closing of the lost plant and the completed renovation of the saved plant. Then you would run the same calculations for spin-off jobs.

In other words, what we know for sure is that 300-350 jobs will be lost, along with all of the economic output and spin-off jobs that those jobs created. We also know that the reinvestment will partially replace the economic output and spin-off jobs originally lost. As I've noted several times, the people quoted in the article think this partial replacement is preferable to the alternative, which is the loss of a plant and no reinvestment at all. I agree with that. I also agree that the reinvestment will save the industry in Austin for a while. However, it would be a mistake to think that is good-news: it isn't; Austin's going to lose hundreds--maybe even thousands--of jobs over the next couple of years because of this; and the reinvestment, although much better than no reinvestment, will not change that.

My attitude isn't pessimism; it's realism. I've lurked on this board for years and have been posting for a few months. During that time, I've read a lot of fascinating and well-informed posts (that's why I keep coming back; well, that and cool pictures). But I've also read a lot of really, really silly posts, and the one thing they tend to have in common is a gormless faith in the strength of Austin's economy in general and the property market in particular. We're doing better than almost everywhere else, but we're still not in good shape, a fact that should be reinforced by every news item about a stalled condo project, a foreclosed development, or, you know, like, the closing of a chip plant. I've lived here a long time and I've seen it before: bust follows boom but precedes another boom. We're not in a bust, but we're closer to that than a lot of you appear to think: look around.

[LoneStarMike]

Well another Austin-based company is no more. Guaranty Bank was taken over by the FDIC today. The acquiring company is Banco Bilbao Vizcaya Argentaria SA, Spain's second-biggest bank. The existing Guaranty branches (I think there are only 5 in Austin) will reopen Monday as BBVA Compass.

http://www.fdic.gov/bank/individual/...aranty-tx.html

I bank at Guaranty and was just at the downtown branch earlier today talking to the tellers about the pending takeover. Hopefully they'll keep the Stassney Lane branch open. Not sure about the downtown branch, though. I think Compass already has a downtown branch.

[Talon]

Originally Posted by Scottolini

Really?

This sounds like a major gain.

I could continue repeating the same facts I've already said a few times, but it seems you want to focus on the short term job loss as the be all end all of whether this is good or bad. Go ahead and partake in your misplaced pessimism if you wish.

A couple points since I have some insight into the affair:

1) Fab 1, the 8" factory was going to close down this year regardless. The economics of the semiconductor industry, specifically the memory market in which Samsung competes had made this fab no longer cost competitive moving forwards.

2) The 2nd factory built in 2006/2007 had already reached the limits of process technology. Moving forward required a copper back end facility. The only question was whether to devote part of the production floor of Fab2 or convert Fab1. From an economic standpoint for Austin it was much better that they decided to invest the money in refitting Fab1 because incorporating the back end facility inside of Fab2 would've reduced overall capacity of the plant and limited it's economic competiveness in the future.

3) The immediate loss of 500 jobs is very regrettable. Many of the jobs were lower paid manufacturing positions but many of them were also engineers and highly trained (and paid) technicians.

4) I would like to see the economic analysis that says this will create 5,000 jobs since most of the supplies purchased by Samsung are not local to the Austin area. I can understand 700 temporary construction contractors but I always find numbers like this fishy.

I'm interested to see what sort of fall out we will see up here in the Round Rock/Pflugerville real estate market since that is where many of these people lived.