Here’s how Applied Materials manages supply chain and semiconductor research

• Tech Wire Asia interviews Brian Tan of Applied Materials
• Tan discusses investment in US and Singapore
  

Earlier this month, Applied Materials, an American maker of semiconductor fabrication equipment, unveiled plans to plow US$4 billion into a collaborative research and development (R&D) facility in Silicon Valley over the next seven years. The 180,000-square-foot facility, known as the Equipment and Process Innovation and Commercialization (EPIC) Center, is expected to create 2,000 engineering jobs.

The EPIC Center will mainly provide chipmakers and university researchers with a space to develop prototype designs for next-generation process tech and pre-release equipment. When the facility come online in 2026, it will be an opportunity to work on, play with, and validate designs at an earlier stage. 

For Applied Materials it presents a chance to develop tools and equipment better suited to emerging semiconductor tech, so much so that the semiconductor equipment maker expects the facility to speed the development of new semiconductor tech by as much as 30% compared to today.

“The industry needs a new model that breaks down traditional silos, builds denser networks of collaboration, and delivers tighter feedback loops that can increase the speed and lower the cost of innovation,” the company said in a statement on May 22. Applied Materials have so far claimed support from more than a dozen chipmakers, foundry operators, and universities, including Intel, AMD, TSMC, MIT, and UC Berkeley, to name a few.

“For the first time, chipmakers can have their own dedicated space within an equipment supplier facility, extending their in-house pilot lines and providing early access to next-generation technologies and tools – months or even years before equivalent capabilities can be installed at their facilities,” the statement reads.

Applied Materials has long advocated ongoing R&D in the semiconductor industry. Since the pandemic, the company has focused on bolstering its R&D capabilities to accelerate the commercialization of new technologies and services that improve chip power, performance, area, cost, and time-to-market (PPACt).

In light of all the recent happenings in the company and the industry, Tech Wire Asia caught up with Brian Tan, Vice President of Applied Global Services and Regional President for Applied Materials Southeast Asia, during SEMICON SEA 2023.

TWA: How critical is R&D in the semiconductor industry?

Tan: Semiconductors have become crucial to the global economy, and because of that, the requirement for R&D and innovations has never been more vital. If you look at where Applied Materials is, especially with our materials engineering leadership position, we drive innovation specifically around these few areas that we call PPACt.

If you break down this entire requirement for innovation, these are a few foundational blocks. For Applied Materials, the critical element of innovation is time. We have a leadership position and hold ourselves accountable for supporting our customers to untangle the most challenging technical problems. 

So we are solving the industry’s toughest challenges.

TWA: How will the EPIC Center in California fit into Applied Materials’ R&D plans? 

Tan: You may have heard that we spent US$2.8 billion last year on R&D – every given year, no less than 10% [of turnover]. As for this, EPIC Center is Applied Materials putting money where its mouth is, investing US$4 billion on just the infrastructure and the capitalization of the center in the next seven years. So that’s a significant commitment. Applied Materials has to maintain our materials engineering leadership. 

And why I use the words innovation and collaboration because, on the innovation front, this center is all about accelerating the speed of innovation. We do that by collaborating and bringing our customers, our industry partners, the best academics, the brightest minds, and the most promising talent together. We are one of, if not the only, companies that can bring these companies into collaboration. 

This physical space is a concept, a platform, to accelerate innovation, and we do that by bringing people in to collaborate in totally different ways than before. So that’s a fundamental shift.

TWA: Let’s briefly get into the semiconductor shortage and supply constraints. Where does the industry stands today?

Tan: I believe there is absolutely no doubt where semiconductors are headed. If you look at what happened in the last super cycle, the three brightest years for the semiconductor industry happened in the darkest years of COVID-19, even amid lockdowns and global disruptions.

Until the end of last year, we saw a minor correction, especially in the memory market. So that has some impact. The pandemic has also exposed the vulnerability of the supply chain situation because this industry went through years of globalization. 

So a lot has changed, and we have understood that the supply chain system is entangled and intertwined. Supply chain efficiency was at a world-class just-in-time method, whereas now everyone is talking of a just-in-case approach. That is why we’re still sorting that out. So in that sense, the last three years have brought some corrections. 

TWA: Has chip nationalism impacted Applied Materials in any way?

Tan: Semiconductors are going to be everywhere. Applied Materials supports all customers globally, and we are very clear on where we believe the industry will go. We are doubling down on critical and principal locations that have worked very well for us, especially in the US and Singapore. 

That’s actually from a client material standpoint, where we will continue to invest. So that strategy for us has been evident.

TWA: What are some of the latest SEA R&D plans?

Tan: The Singapore 2030 plan covers the entire aspiration of what Applied Materials will be doing in the next seven years towards the end of this decade. It is focused on this expansion of our manufacturing capacity. I’ve told you why semiconductors are so important and how we need the physical ability to manufacture them, and it has to be in the correct location. So we decided Singapore is the right place. 

Therefore, we are deepening our R&D here, so Singapore is one critical hub. We also want to deepen partnerships with ecosystems, including academia and suppliers. The last one is so foundational, which is our commitment to upskill, reskill, and bring in top talent. Those four pillars are critical as part of the Singapore 2030 plan. 

Singapore is Applied Materials’ sole Center of Excellence for advanced packaging. So every work we do for advanced packaging is done out of Singapore. And I think you know very well that heterogeneous integration and advanced packaging is one of the most significant technologies since there are talks on the shrinking of devices, and that is why I firmly believe it will be the next major thing in the industry.

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