Advanced Micro Devices late last week announced that it had signed a Grant Disbursement Agreement (GDA) with the state of New York, under which the company may receive $650 million grant from the state if it starts to construct its fab between 2007 and 2009.

AMD will have a two-year window from July 2007 to July 2009 in which AMD can choose to initiate the building of a new 300mm wafer fabrication facility in Saratoga County, New York. AMD’s execution of the agreement comes after New York's Public Authorities Control Board (PACB) voted on Wednesday to approve a $650 million grant for AMD, the company indicated.

AMD anticipates the need for a new facility and has selected the Luther Forest Technology Campus as an ideal site. Similar to AMD’s other fabrication facilities, construction of the building is expected to take about a year with another year needed for the installation of equipment and tools. The project has the potential to directly create approximately 1200 new jobs, along with thousands of indirect jobs through supporting construction and infrastructure projects.

Earlier AMD said that plant will initiate manufacturing in 2010 and will allow AMD to increase manufacturing capacities by 50% when compared to expected 2008 level. The incentives offered by New York include a $500 million grant for construction, $150 million in R&D subsidies to be used over 5 years, and $250 million tax rebate.

“The timing of the final decision depends on a number of factors, including future market demand, but with a growing customer base, leading technology and the hope for a truly fair and open competitive playing field, AMD remains optimistic about prospects for continued momentum in the years ahead,” AMD’s statement claims.