Applied Materials to invest $4 billion in Silicon Valley chip research center

By Jane Lanhee Lee and Stephen Nellis

SANTA CLARA, California (Reuters) – U.S. semiconductor toolmaker Applied Materials Inc (NASDAQ:) on Monday said it plans to spend up to $4 billion on a research center in the heart of Silicon Valley to speed up advances in semiconductor manufacturing.

The center, which will be based in Sunnyvale, California, will come on line in 2026 and create up to 2,000 engineering jobs, said Applied, which is the world’s biggest maker of the tools used in manufacturing chips.

The facility will host about $25 billion of research work over its first decade, pulling together staff from research universities and major chipmakers such as Intel Corp (NASDAQ:), Taiwan Semiconductor Manufacturing Co and Samsung Electronics (OTC:) Co Ltd, among others.

The announcement comes as the U.S. is trying to bring back advanced semiconductor manufacturing with a $52 billion measure passed last year.

Applied Materials said the new facility, called the Equipment and Process Innovation and Commercialization (EPIC) Center, will be the size of more than three American football fields. Applied said it will invest in it over seven years and wants subsidies from the government through the CHIPS and Science Act.

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

Taking ideas from research universities and turning them into tools used in factories can take many years, said Applied executives. By putting universities and chip manufacturers under one roof with Applied, the company hopes to slash that time by nearly a third by having the three groups carry out some of their work in parallel.

U.S. Vice President Kamala Harris is expected to attend an Applied Materials’ event in Silicon Valley announcing the center, along with top executives from major chip companies.

Senior administration officials briefing the media ahead of the event said the Commerce Department has received more than 300 statements of interest for the $39 billion portion of the CHIPS Act for manufacturing incentives. They said details on application requirements for $11 billion set aside for research facilities will come in the early fall.