By Mark Roberti

Dec. 1, 2005—East Fishkill, a town of 26,000 people located 70 miles due north of New York City, is laced with two-lane roads dotted with small homes, a couple of churches and a community center. The biggest news in the town last year was that the local 14-and-under roller hockey team won the National USA Inline Championship. Few would suspect that this unassuming town in the lower Hudson Valley is home to one of the world's most advanced manufacturing facilities.

IBM's East Fishkill semiconductor fabrication facility, or fab, is a 1,027-acre campus with more than 60 buildings. Building B323 looks indistinguishable from the others, but it's actually unique. That's where IBM turns silicon wafers with a diameter of 300 millimeters, the latest standard in the intensely competitive semiconductor market, into microchips for cell phones, video game consoles and other high-tech products. It had been home to a 125-millimeter wafer fab, but the company closed that facility in the early 1990s when demand for these wafers dried up. The 140,000-square-foot plant underwent a complete renovation costing $2.5 billion before it went operational in mid-2002.

Attention to detail is critical, as the smallest defect can render a portion of the wafer unusable.

The semiconductor industry has moved from 125 millimeters to 200 millimeters and now to 300 millimeters. The larger-diameter wafers yield more chips. IBM's East Fishkill fab produces hundreds of millions of customized micro-chips annually from 300-millimeter wafers.