Silicon Valley Chosen for $4 Billion Chip Research Center

Silicon Valley got its name from computer chips, but no longer plays a central role in shaping how they are made. A major supplier to the industry hopes to change that.

Applied Materials, the biggest maker of machines for producing semiconductors, said on Monday that it planned to build a massive research facility near its hometown, Santa Clara, Calif., to allow chip makers and universities to collaborate on advances to make more powerful chips. Silicon Valley hasn’t seen a comparable semiconductor construction project in more than 30 years, industry analysts say.

The company expects to invest up to $4 billion in the project over seven years, with a portion of that money coming from federal subsidies, while creating up to 2,000 engineering jobs.

The plan is the latest in a string of chip-related projects spurred by the CHIPS Act, a $52 billion package of subsidies that Congress passed last year to reduce U.S. dependence on Asian factories for the critical components. What sets Applied Materials’ move apart is that it focuses on research, rather than manufacturing, and is a substantial new commitment to the industry’s original hub.

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