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Applied Materials Plans to Build $4B Project Near HQ

Tue May 30, 2023 - West Edition #12

Rendering of the future EPIC Center
(Applied Materials rendering)
Rendering of the future EPIC Center (Applied Materials rendering)

Applied Materials Inc. is planning to spend as much as $4 billion on a new research-and-development center near its California headquarters, embarking on a now-rare building project in the heart of Silicon Valley.

The EPIC Center, located on an existing Applied Materials campus in Sunnyvale, will be the industry's biggest R&D facility dedicated to semiconductor equipment and processes, the company said recently. Applied Materials is the largest seller of chipmaking gear and the project will let the company and its customers rapidly develop new production techniques.

Like many of the industry's construction projects these days, the effort also is a bid to tap government funding. The U.S. Chips and Science Act, passed last year, will allocate roughly $52 billion to help revitalize domestic R&D and manufacturing and companies are angling to benefit from the windfall. Applied Materials' ambitions with the new center will hinge on how much assistance it gets, Chief Executive Officer Gary Dickerson said in an interview.

"The scale and pace of what we do is dependent on incentives," he said. The company chose to build in Silicon Valley — a place that's become too costly and burdensome for most new chip facilities — because of the proximity to many companies with an interest in semiconductors, he said. Intel Corp., Nvidia Corp. and Advanced Micro Devices Inc. are all based nearby, approximately an hour's drive south of San Francisco.

The announcement coincides with a summit of research and design executives from Applied Materials' customers — an event that will be attended by Vice President Kamala Harris.

The new facility is designed to speed up improvements in the way that semiconductors are made, helping the chip business grow into a trillion-dollar market this decade. The EPIC Center, whose name is short for equipment and process innovation and commercialization, will let chip manufacturers try out new machinery in something close to a complete production line.

That should make it faster and easier to fine-tune new production technologies.

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