Applied Materials plans $4B Silicon Valley chip research facility

Dive Brief:

  • Applied Materials, a Santa Clara, California-based semiconductor company, plans to build a $4 billion chip research facility in the heart of Silicon Valley in Sunnyvale, California, according to a company press release.
  • The chip maker expects its 180,000-square-foot innovation center to open by early 2026 and to generate about 1,500 construction jobs during the building period, according to the release.
  • The overall value of Applied Materials’ investment, which can jump up to $25 billion overall, relies on support from the U.S. government through provisions of the CHIPS and Science Act, according to the release.

Dive Insight:

The $4 billion facility is the latest sign that the $52.7 billion CHIPS Act has been successful in reeling semiconductor production back to the U.S., according to a White House press release.

Private companies have announced nearly $140 billion in investments in semiconductor production, supply chains and research and development to be made over the next decade, according to the White House release. 

A few major semiconductor projects include Intel’s investment of more than $20 billion to build two semiconductor facilities in Ohio, and Texas Instruments’ $11 billion investment to extend its semiconductor wafer fab plant in Utah.

Despite those wins, the U.S. is not a lock for major semiconductor plant locating. Taiwanese electronics giant Foxconn recently broke ground on a $500 million in a factory in India, after a plan for it to build a $10 billion plant in Wisconsin fell through in 2020.  

More chips plans ahead

In the U.S., there could be more semiconductor construction activity on the horizon, even after a 68% drop in manufacturing starts in April, according to Dodge Construction Network.

For instance, the Department of Commerce has already received 300 Statements of Interest from potential applicants, including from Applied Materials, related to CHIPS incentives. Those applicants cover projects in 37 states and all parts of the semiconductor ecosystem, according to the Biden administration.

Indeed, shortly after passage of the CHIPS Act, an industry observer told Construction Dive that the $52.7 billion legislation’s true impact would range significantly higher – by as much as a factor of 10 – after the private investment it was designed to spur was taken into account. 

Once complete, the Applied Materials facility will be the world’s largest and most advanced facility for collaborative semiconductor process technology and manufacturing equipment research and development, according to Applied Materials. 

Its goal is to provide an industry resource for partnering with major universities to accelerate the commercialization of academic research for chip manufacturing and equipment as the process becomes increasingly complex. 

The multi-billion facility aims to accelerate the pace of new manufacturing innovations, reducing the time it takes the industry to bring a technology from concept to commercialization by several years, according to the company.

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