Semiconductor Maker Applied Materials To Set Up $4B Center To Push Chip Research

U.S. semiconductor manufacturing company Applied Materials said it will invest up to $4 billion in a new research facility in California to conduct further study on tools for chipmaking.

The facility, called the Equipment and Process Innovation and Commercialization (EPIC) Center, will be based in Sunnyvale, and will be online by 2026. The company plans to create up to 2,000 engineering jobs with the new center.

According to Applied Materials, the world's biggest maker of elements used in manufacturing chips, the center is aimed at designing the next generation of tools for semiconductor manufacturing. The process will also include collaboration with leading chipmakers, who will use the tools in their facilities, The Hill reported.

The rare building project in the heart of Silicon Valley will be the biggest R&D facility in the semiconductor industry, according to Bloomberg. Industry analysts point out that Silicon Valley has not seen a promising semiconductor construction project in more than 30 years.

With the facility, Applied Materials plans to conduct $25 billion worth of research work over its first decade. The company will team up with researchers from several leading universities and major chipmakers, including Intel Corp, Taiwan Semiconductor Manufacturing Co and Samsung Electronics. Applied executives suggested that they plan on taking ideas from research universities and transforming them into productive tools. They further aim to cut time on the project by nearly third with at least three groups working on it parallelly.

Seeking subsidies from the government using the CHIPS and Science Act, Applied said it will invest in the facility over seven years.

"We're absolutely going to go forward. The scale of how fast we invest is going to be tied to the government incentives," Applied Materials CEO Gary Dickerson told Reuters. "The economics of this are compelling in terms of accelerating the technology road maps for our customers and also for Applied."

Meanwhile, an event by Applied Materials is scheduled to take place Monday in Sunnyvale in the presence of Vice President Kamala Harris to discuss the project with other officials.

The development comes amid a wave of chip-industry projects advancing semiconductor manufacturing in the U.S.

Senior government officials, addressing a media briefing, said the Commerce Department has received more than 300 statements of interest for the manufacturing incentives worth $39 billion under the CHIPS Act.

Last August, President Joe Biden signed legislation to provide $53 billion in subsidies to the semiconductor industry with the aim of spurring chip-making in the country.

"The future is going to be made in America," Biden had said, calling the landmark bill "a once-in-a-generation investment in America itself."

Federal officials said the act has not only driven investments, but has also catalyzed the private sector to ramp up efforts to foster semiconductor manufacturing. According to the White House, the bill's passage has boosted new chip investments, with Qualcomm, for instance, agreeing to buy an additional $4.2 billion in semiconductor chips from GlobalFoundries' New York factory.

"As part of the bipartisan CHIPS and Science Act, the Department of Commerce is overseeing $50 billion to revitalize the U.S. semiconductor industry, including $39 billion in semiconductor incentives," the Commerce Department said in a statement. "The first funding opportunity seeks applications for projects to construct, expand, or modernize commercial facilities for the production of leading-edge, current-generation, and mature-node semiconductors."

The Biden administration has been focused on improving domestic manufacturing of semiconductors after the COVID-19 pandemic amplified supply chain disruptions in the industry. The government further aims to cease reliance on China for semiconductors in view of tough competition from Beijing.

Since the introduction of the CHIPS Act, more than 50 new facility projects have been announced and private companies have pledged over $210 billion to the semiconductor industry.

"44,000 new high-quality jobs announced in the semiconductor ecosystem as part of the new projects, which will support hundreds of thousands of additional jobs throughout the broader U.S. economy," a blog by the Semiconductor Industry Association added.