Applied Materials to Build $4 Billion Chip Research Facility in Silicon Valley

Aim is to speed development of advanced semiconductors

Applied Materials said it would invest up to $4 billion in a new California facility to conduct research on tools for making semiconductors, adding to a wave of chip-industry projects in the U.S. spurred on by federal government subsidies.

The Santa Clara, Calif.-based company, a leading maker of machines used to make advanced chips increasingly seen as crucial to modern economies and geopolitical power, will invite chip makers and universities to collaborate and experiment with its equipment at the facility, which is expected to be complete by 2026.

That model could cut the time it takes to develop chips by 30% in an era when manufacturing is becoming increasingly complex, the company said. As the drive to make faster-calculating chips by shrinking transistors and packing more of them on chips runs up against physical barriers, chip makers are turning to new materials and creative engineering to advance the industry.

“Inclusive innovation is how the most successful companies in the industry work,” Applied Materials Chief Executive Gary Dickerson said.

The company, he added, plans to build the facility no matter what government support it gets, but its size and pace hinge on how much Washington kicks in.

So far, around 300 companies have indicated to the Commerce Department that they are interested in federal incentives for chip manufacturing and the chip-making supply chain, the Biden administration said last week. The companies are beginning to apply for the money under the 2022 Chips and Science Act, which provided $53 billion to strengthen the U.S. semiconductor industry.

A raft of large chip makers announced new projects in the U.S. ahead of the act’s passage. Intel, Taiwan Semiconductor Manufacturing and Samsung Electronics—three of the largest chip makers in the world—are building chip factories in Ohio, Arizona and Texas and are expected to angle for federal subsidies.

Vice President Kamala Harris will visit an Applied Materials facility in Sunnyvale, Calif., on Monday to mark the company’s investment, senior administration officials said.

The officials touted the news as evidence that the Chips Act incentives are working to attract industry investments, and said they are moving to allocate the funds as quickly as possible. On a call with reporters, the officials declined to comment on which companies and projects would receive support.