During the worst days of the pandemic, a lack of chip may have prevented you from buying a Ford F-150 or a Sony PlayStation. Now some of the $53 billion in federal funding to try to ease the problem will help grow a new chip-making research center in Silicon Valley.
Vice President Kamala Harris on Monday visited Applied Materials’ Sunnyvale, Calif., headquarters while the chip manufacturing equipment supplier detailed a $4 billion investment center in the high-tech hub of California for a 30% increase in the pace of processor manufacturing improvements. The $53 billion has yet to be awarded, but the new Applied Materials center is exactly the kind of US research and development facility it was designed to help.
Chip development has slowed in recent years due to the physics and engineering challenges of miniaturizing chip circuitry. At the same time, most of the chip manufacturing business has moved from the United States to Taiwan, South Korea and other Asian countries.
The chip shortage caused by the pandemic has exposed problems in the global supply chain and shown how dependent the United States economy is on overseas manufacturing for the most important component of almost everything that has a battery or electrical plug. The result was the 2022 passage of the CHIPS and Science Act, with $53 billion in subsidies for chip research and manufacturing. So far, the Commerce Department has received 300 expressions of interest from applicants hoping to use the funds.
Applied Materials’ new 180,000-square-foot Equipment and Process Innovation and Commercialization Center is designed to accelerate growth and anchor the industry in the US. At the EPIC Center, Applied Materials hopes to accelerate the adoption of new ideas from academia and their transfer to companies such as TSMC, Samsung and Intel that actually build the chips.
How much money the EPIC Center gets from the government will determine how big it will be. The company expects to spend up to $4 billion over seven years, most of it in the first three years.
“We believe that EPIC is the right platform for the industry regardless of government incentives. However, the scale of the center will be subject to the level of government incentives,” said Applied Materials in a statement.
Applied Materials is one of the leading companies that manufactures chip manufacturing equipment. This is what companies like Intel, Samsung and TSMC buy so they can make processors for phones, cars, toys, TVs, military equipment, appliances and many other products. It is at the forefront of efforts to continue progress in making chip circuitry smaller, more efficient, and more powerful.
The EPIC Center is expected to employ 1,500 construction workers when it is built and create 2,000 engineering jobs once it is completed.
By White House accounting the CHIPS and Science Act has spurred $140 billion in corporate semiconductor manufacturing investments to date.