Infineon Technologies AG plans to expand its East Coast presence with the acquisition of a facility in North Carolina stemming from an investment deal that could provide $9.5 million over 11 years in exchange for 400 jobs.

Under terms of the deal, Infineon will take over an office complex in Cary, N.C., this fall to house research and development, human resource, IT, logistics, finance and administrative functions. It wil also invest $8 million in land, building, infrastructure and equipment by the end of 2004.

The company will move approximately 45 jobs from its U.S. headquarters in San Jose, Calif., and 70 research and development employees currently working for its memory products group in nearby Research Triangle Park. The remainder of the jobs will be created over the course of the deal and will pay an average salary of $75,000 per year.

In return, the state of North Carolina will forgive a percentage of the employee withholding tax totaling 65 percent of the total for each year. Under the agreement, 25 percent of that amount would be paid into a fund used to subsidize infrastructure improvements in the state's poor, rural counties.

The deal requires Infineon to create a minimum of specified job targets each year and retain those jobs over the course of 11 years. For instance, Infineon must add 66 out of 110 promised jobs by the end of 2003 to comply. By the end of the period, it must add a total of 320 jobs.

In a statement, the state Department of Commerce estimated the project could generate a "cumulative gross state product increase of about $620 million and a cumulative net state fiscal impact of $10.3 million over the life of the grant, as well as 668 jobs from all sources when the company reaches anticipated employment targets."

Miriam Martinez, Infineon Technologies North America vice president and chief financial officer, said the move to North Carolina is part of the parent company's previously announced 5-to-1 strategy to focus growth in the U.S., China and Japan.

The company has been restructuring since 2001, reshuffling its worldwide workforce and cutting costs on an ongoing basis. Infineon Technologies AG has also announced plans to establish a new worldwide headquarters outside of its current offices in Munich. Germany.

By: DocMemory
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