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Sony closes Shadyside operations

Tuesday, August 27, 2002

By Dan Fitzpatrick, Post-Gazette Staff Writer

Sony Corp. recently shut down its operations in its six-person Shadyside semiconductor design center, putting an end to a project hailed two years ago by then-Gov. Tom Ridge.

The company attributes the decision to a recent downturn in the semiconductor industry, which forced Sony to lay off two design center employees and transfer the rest to San Jose, Calif. The moves, according Sony spokesman Michael Koff, are part of a larger consolidation of such workers in Japan and the West Coast.

Despite its decision to vacate the Shadyside office, on the boundary of East Liberty on South Highland Avenue, Sony remains a member of the Pittsburgh Digital Greenhouse, a consortium of corporations, universities and nonprofit agencies that urged Sony to build the center as part of a state-funded effort to make the Pittsburgh area a worldwide leader in chip design.

Ridge announced Sony's plans at a July 2000 news conference celebrating the Digital Greenhouse's one-year anniversary.

Sony's original plan was for the 10,000-square-foot center to employ about 10 people and as many as 50 over time, part of the Greenhouse's goal to create as many as 1,500 jobs in three years. Sony became the first Digital Greenhouse member to build a design center, taking space in a renovated three-story building. After Sony agreed to open the center, Oki Electric Ltd and RedCreek Communications followed with announcements about their own design centers in the Pittsburgh area.

Greenhouse Chief Executive Officer Dennis Yablonsky said yesterday that Sony's decision, while "disappointing," was the result of larger problems in the semiconductor industry and not related to any problems with the Digital Greenhouse.

"It was a small setback," he said.

Yablonsky also emphasized that Sony is still on the Greenhouse board, and that it continues to fund research at local universities. In fact, a Sony design center executive makes the trip to Pittsburgh every few weeks to check on the research projects at local universities, Yablonsky said.

Nevertheless, Sony's departure from Shadyside came as a "devastating loss" to Michelle Frangos, developer of Sony's design center building.

Sony, she said, was the company that "greenlighted" her project, which remains empty except for one lower-level tenant that plans to open its doors Sept. 1 and another tenant that is expected to move to the middle floor in the fall.

The good news for Frangos is that Sony signed a five-year lease and remained committed to fulfilling the terms of that agreement. Koff, the Sony spokesman, said Sony was looking for other companies to fill the space.

Meanwhile, Sony's corporate logo will keep its spot in the front of the Shadyside building.

"They are still there," Frangos said. "They might not physically be there, but they are obligated."

Dan Fitzpatrick can be reached at dfitzpatrick@post-gazette.com or 412-263-1752.

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