Applied Materials Eyes Tamil Nadu For Semiconductor Expansion


(MENAFN- KNN India) Chennai, Sep 9 (KNN) Applied Materials, the world's second-largest Semiconductor equipment maker, is reportedly planning a significant expansion into India, specifically targeting Tamil Nadu.

With an annual revenue of USD 26.52 billion, Applied Materials is keen to establish a state-of-the-art technology development center in Taramani, Chennai.

This move aligns with the company's broader strategy to diversify its global operations, especially after recently losing its leading position to Dutch rival ASML.

Experts suggest that the company's foray into Tamil Nadu could be part of a "China Plus One" strategy. This approach seeks to reduce dependence on China, a market where Applied Materials derives 43 per cent of its sales.

The company's sales to Chinese clients were notably impacted by recent U.S. export restrictions, which were introduced in October 2023.

The proposed Chennai facility will focus on advanced artificial intelligence (AI)-enabled technologies for semiconductor and equipment manufacturing. This development is expected to generate approximately 500 jobs.

While the specific focus of the facility-whether it will emphasise core fab tool manufacturing or semiconductor production-is still under wraps, it marks a significant commitment to India's burgeoning semiconductor sector.

Industry sources indicate that the Chennai center could serve as a precursor to more substantial manufacturing ventures, contingent upon the Indian government's updated incentives under the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS).

The potential for further investment will largely depend on the final details of these incentives.

The Indian Union Cabinet has already approved five semiconductor units, including notable projects by American and Indian companies.

Among them are Micron's assembly, testing, marking, and packaging (ATMP) facility in Gujarat, and Tata Electronics' semiconductor fab unit in Dholera, Gujarat, in collaboration with Taiwan's Powerchip Semiconductor Manufacturing Corporation (PSMC).

Other approved units include Tata Semiconductor Assembly and Test Private Ltd in Assam and CG Power's unit in Gujarat, in partnership with Japan's Renesas Electronics Corporation and Thailand's Stars Microelectronics.

Tamil Nadu's competitive edge includes a subsidy of up to 50 per cent on capital expenditure for semiconductor manufacturing units and additional payroll reimbursements, enhancing its attractiveness as an investment destination.

As Applied Materials continues to explore new markets and opportunities, Tamil Nadu stands out as a key player in the global semiconductor landscape.

(KNN Bureau)

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