Applied Materials mulls delaying Silicon Valley R&D facility over funding shortfall

Applied Materials the largest maker of semiconductor equipment in the US, may postpone or abandon its plans to build a $4 billion research and development facility in Silicon Valley due to a lack of government funding, the San Francisco Chronicle reported on Monday citing sources familiar with the matter.

The Biden administration said last month it would scrap plans to fund the program from the $52.7 billion Chips and Science Act due to “overwhelming demand” for funding awards to subsidize chip production.

President Joe Biden had signed the bill in August 2022 amid a global shortage of chips, in a bid to bolster US competitiveness with China in science and technology.

The measure aimed to subsidize US chip manufacturing and expand research funding to address a recurrent shortfall that had harmed a variety of sectors, from cars and weaponry to washing machines and video games.

Applied Materials, a strong candidate for a research award from the program, announced its plans for the California research center in May 2023 to speed up advances in semiconductor manufacturing. Reuters