Silicon Valley was named after computer chips, but it no longer plays a central role in shaping how they are made. A major supplier to the industry hopes to change that.
Applied Materials, the biggest maker of machinery for semiconductor production, said on Monday it plans to build a massive research facility near its hometown of Santa Clara, Calif., to allow chip makers and universities to collaborate on advances to make more powerful chips. Silicon Valley hasn’t seen a comparable semiconductor construction project in more than 30 years, industry analysts say.
The company expects to invest up to $4 billion in the project over seven years, with a portion of that money coming from federal grants, creating up to 2,000 engineering jobs.
The plan is the latest in a series of chip-related projects spurred by the CHIPS Act, a $52 billion grant package that Congress passed last year to reduce US reliance on Asian factories for critical components. What sets the Applied Materials movement apart is that it focuses on research rather than manufacturing, and is a substantial new commitment to the original heart of the industry.
Chip makers who grew up in Silicon Valley have long opted to build new “fabs,” fancy factories that make chips from wafers of silicon, in less expensive states and countries. But Applied Materials is betting that the technical talent at nearby universities and local companies that design chips will spur innovation quickly, making up for cost differences with other locations.
“You can connect more leaders in this ecosystem here than anywhere else in the world,” said Gary Dickerson, CEO of Applied Materials. “There is no place like this.”
Applied Materials hosted an event Monday in Sunnyvale, Calif., to discuss the project, drawing a large audience that included employees, customers, city officials and Vice President Kamala Harris.
The company said it would use a 150-pound piece of silicon, which one executive called “easily the largest piece of silicon in Silicon Valley,” as the cornerstone for the new center.
Politicians from both parties have supported the CHIPS Act, in part because of fears that China will one day exercise control over Taiwan and the factories there that produce the most advanced chips. In addition to encouraging domestic chip manufacturing, the legislation allocated an estimated $11 billion to spur related research and development.
Chip research now takes place in multiple phases at multiple locations, including university labs and collaborative centers such as the Albany NanoTech Complex in New York. Applied Materials participates with other companies in that center and operates a research facility in Silicon Valley where chip makers can work with its machines and those of other tool makers.
But many of the key tasks in developing new production processes are performed by chip makers in factories equipped with a wide range of equipment. The proposed center, which Applied Materials calls Epic, is expected to have an ultra-clean production space larger than three football fields and is designed to provide university researchers and other engineers with comparable resources to experiment with new materials and techniques to create advanced chips. .
One goal is to reduce the time it takes for new ideas to flow from research labs to companies designing new manufacturing equipment, information that is now often delayed as it sifts through chip makers.
“The problem is that these customers need time to figure out what they need,” said H.-S. Philip Wong, a Stanford electrical engineering professor who was briefed on the company’s plans. “There’s a big hole in there.”
Applied Materials also said chip makers will be able to reserve space at the center and try out new tools before they are commercially available.
The plan depends in part on whether Applied Materials can win subsidies under the CHIPS Act, which the Commerce Department says has already attracted expressions of interest from more than 300 companies. Mr. Dickerson said the company planned to build the center anyway, but that government funding could affect the scale of the project.
Assuming the center evolves as planned, it could substantially bolster Silicon Valley’s role in chip evolution, said G. Dan Hutcheson, vice president of market research firm TechInsights.
“It really is a vote of confidence for the Valley,” he said.
