Applied Materials to establish semiconductor manufacturing unit in India

By Staff Report September 10, 2024 7:19 pm IST

Applied Materials plans to establish a manufacturing unit in Chennai, Tamil Nadu, and develop an AI-enabled technology centre, potentially creating 500 jobs, as India intensifies its semiconductor efforts.

Global toolmakers are increasingly targeting India for semiconductor manufacturing, with Applied Materials, the world’s second-largest fab toolmaker, planning to establish a manufacturing unit in Tamil Nadu. The preferred location for this investment is Taramani, Chennai, as the country steps up its semiconductor efforts. Applied Materials, the world’s second-largest semiconductor equipment manufacturer, has an annual revenue of $26.52 billion. This move could lead to a major breakthrough in New Delhi’s semiconductor push.

In addition to the potential manufacturing unit, Applied Materials is planning to develop an advanced AI-enabled technology centre in Chennai, which is expected to create approximately 500 jobs. The centre could serve as a precursor to larger manufacturing operations, pending government incentives under India’s Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS).

The company’s expansion into India coincides with the rapid growth of the country’s semiconductor industry. The Indian government has approved five semiconductor projects, including a $2.75 billion investment by Micron for an assembly and testing facility in Gujarat, India’s first semiconductor fab unit in Dholera, and ventures by Tata Electronics, CG Power, and Kaynes Semicon.

Semiconductor fabrication facilities (Fabs) in India rely on various SME vendors for their fabrication process, which often specialises in specific steps. Applied Materials’ potential investment could strengthen India’s growing semiconductor ecosystem, reduce its dependency on imports, especially from China, and strengthen its position as a key player in the global semiconductor supply chain. Applied Materials’ entry into India’s semiconductor manufacturing sector could significantly boost its long-term growth and innovation.