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Applied Materials banks on semicon 'multiyear expansion' wave

Company's new manufacturing facility in Singapore is geared toward providing equipment for chipmakers, which are ramping up investments as part of the technology's refresh cycle, says exec.
Written by Kevin Kwang, Contributor on

SINGAPORE--As the semiconductor industry emerges from the economic recession of the past two years, a "multi-year expansion" is expected as part of the technology's refresh cycle, noted an Applied Materials executive, and the company expects to cash in on this.

Speaking to media at the opening of the company's Singapore Operations Center (SOC), Michael Splinter, Applied Materials' chairman and CEO, said the new facility will contribute about 50 percent to its global semiconductor equipment supply in the next few years.

"The opening of our Singapore Operations Center will be especially important in meeting an expected multi-year increase in demand for our advanced semiconductor production technology," Splinter said, adding that more than 70 percent of its semicon business, and revenue, comes from Asia.

The executive noted the company's wafer fabrication equipment business started improving "last summer" and it expects its customers to spend between US$21 billion to US$23 billion this year, comparatively more favorable than 2009's spend of US$13 billion.

"The company's silicon systems group is expected to grow by 120 percent and will grow faster than the overall industry," he said, adding the group contributed 65 percent of the company's overall revenue for the last quarter.

Splinter revealed the company spent "no more than US$60 million" to build its Singapore facility, which spans 32,000 square meters (sqm). Applied Materials is looking to hire up to 800 employees to support its silicon systems group at the SOC, as it ramps production. A portion of the company's 550 employees in Singapore has been dedicated to the new facililty, he said.

Russell Tham, Applied Materials' Southeast Asia president, told ZDNet Asia the company's three business units--semiconductor, solar and LCD--are all "equally important" going forward.

However, in terms of time sensitivity, he echoed Splinter's announcement that the company plans to cash in on the semicon market's increased investments for silicon manufacturing equipment following a two-year slump.

As for the renewable energy business, its development "depends on various nations' government policies", Tham said, adding that the "timing is out of our hands".

Concerns over Asia expansion?
Applied Materials' focus on Asia may have caused some resentment in its solar unit in the United States, according to a report last week by EE Times.

SunFab, the company's solar unit which deals with standalone solar equipment as well as turnkey solutions, was reportedly issued a warning by Splinter to deliver on its deadlines.

Splinter said at an internal meeting that SunFab must deliver by end July 10 percent efficiency for its solar technology, against its current 8 percent to 9.1 percent efficiency, or face a termination in funding.

EE Times said the incident as well as Applied Materials' expansion in Asia, are causing growing employee unrest in the United States.

''It is pretty obvious that the 'Future Applied' [one of the company's slogans] does not include the U.S. workers here that have built that company,'' one employee told EE Times.


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