Citing India’s cost advantage and urging improved supplier incentives for growth, Applied Materials is considering operations in Gujarat or Assam to be closer to chip facilities.
Applied Materials, a prominent supplier to semiconductor manufacturers, is considering establishing operations in Dholera and Sanand in Gujarat or Morigaon in Assam. According to a report by the Economic Times, this move would bring the company closer to emerging chip fabrication and assembly facilities in these regions.
According to the report, the company is anticipating a ‘second wave of growth’ as its clients are establishing factories in India.
The government has recently approved incentives for five semiconductor projects—four in Gujarat and one in Assam. For this sector in India to advance, the company emphasised the importance of a robust supplier network, necessary infrastructure, and attractive incentives.
Prabu Raja, president of the Semiconductor Products Group at Applied Materials, explained at the SEMICON India 2024 event that proximity to suppliers is crucial for speed. He noted that India’s availability of skilled talent and cost-effectiveness make it an attractive location for suppliers to set up operations.
Raja urged India to improve supplier incentives, stating current subsidies are less competitive. He highlighted India’s cost advantage but noted that better incentives would make it more attractive.
Regarding the possibility of setting up a manufacturing unit in Tamil Nadu, Raja mentioned that Applied Materials is exploring options globally as part of its expansion strategy. However, he emphasised that no decisions have been made yet, and the company does not rely on speculation.
Recently, Applied Materials signed an MoU with the Tamil Nadu government to create an advanced AI-enabled technology development centre in Taramani, Chennai, focusing on semiconductor manufacturing and equipment.
Satheesh Kuppurao, Group Vice President of Business Development & Growth for the Semiconductor Products Group, added that the company is now developing the local supply chain.
