In May 2023, Applied Materials announced our new Equipment and Process Innovation and Commercialization platform, the centerpiece of which will be the EPIC Center – a next-generation, multi-billion-dollar collaborative research facility located in Silicon Valley.

The question of where to build the EPIC Center was not easy to answer. In fact, the decision warranted a multi-year study evaluating many factors spanning construction and operating costs, accessibility to global high-tech hubs and talent availability. The selection process was heavily influenced by our perspective on the future of the semiconductor industry, where we see incredible opportunities fused with some formidable challenges.

Anything and everything that generates, transmits, stores or processes data requires chips, fueling semiconductor demand and putting the industry on a path to $1 trillion of annual revenues by the end of this decade^[1]. However, realizing this growth potential is not assured. Significant improvements in the performance, power-efficiency and cost of chips are needed to allow technologies like AI to scale. The development roadmap for semiconductors is rich with possibilities, but also mind-blowing complexity.  New device architectures, intricate three-dimensional structures, novel materials, new techniques for shrinking feature dimensions, and new approaches to connecting individual chips together will all be needed. As complexity rises, so do the industry’s costs, time-to-market and carbon footprint. At Applied, our belief is that complexity-driven challenges can be neutralized in two ways – increasing innovation and commercialization velocity, and transforming the collaboration model. By more tightly linking the industry’s eclectic ecosystem all the way from the foundational materials science – the fundamental building blocks of chipmaking – to the systems companies pioneering end applications, and everything in between, next-generation technology can be invented and scaled to volume production faster and at lower cost.

These themes of velocity, collaboration and connectivity are central to the EPIC concept. Within a fifty-mile radius of the EPIC Center’s location in Sunnyvale, California there are technology companies with a combined market capitalization of $10 trillion – that’s 25 percent of the value of the S&P 500^[2]. While that is an impressive statistic, it’s no secret that Silicon Valley has been a global force in technology for decades, and we believe its formula for success will endure long into the future. Its “not-so-secret” success formula is all about ICs… but not just integrated circuits.

One IC is Ideas and Capital – the fusion of game-changing ideas and people willing to invest in them. Silicon Valley is synonymous with start-ups and venture capital. Over the past twenty years, Silicon Valley has accounted for 40 percent of total venture capital investments in the United States^[3]. In 2022, that equated to about $50 billion of capital deployed, and that’s a dazzling amount of money – until you start thinking about semiconductors. In that same year, the top five chipmakers and top five equipment companies combined spent around $55 billion in research and development^[4] as they invested in their own game-changing ideas.

A second IC is Innovation and Commercialization. Breakthrough innovation alone is not enough, you need to be able to scale and master the economics. For example, the processor chip in your smartphone is an aggregation of decades of groundbreaking innovations that represent one of humankind’s greatest scientific and engineering accomplishments. As small as a fingernail and thinner than a sheet of paper, that chip contains 15 billion transistors connected with 60 miles of wiring. It is built from 25 materials combined in a hundred different ways, the thinnest layer of which is just four atoms thick. But how those innovations have been commercialized is just as important. It’s the fact that billions of those chips can be produced a year, each costing a few tens of dollars, which makes it possible to put some of the world’s most advanced technology in the hands of almost everyone on the planet.

Another ingredient to Silicon Valley’s magic is Inclusive Collaboration. Throughout its history, the Valley has attracted top talent from around the world and demonstrated that great ideas can come from anyone. It blends different scientific and engineering disciplines and blurs organizational boundaries. That smartphone in your pocket is not the work of a single company, it is an amazing integration of thousands of innovations from hundreds of different companies working together.

As new technology transforms the world at an unprecedented pace, there are profound implications for all of us. As organizations and individuals, we need to evolve and innovate. We need to innovate the way we innovate, and we need to innovate the way we work together. As the new hub of Applied’s global R&D network, the EPIC Center is designed to be a catalyst for the success of our customers and partners. And we believe the DNA of Silicon Valley will be a catalyst for the success of the EPIC Center.

¹ Source: SEMI, TechInsights
² Source: Applied Materials
³ Source: Silicon Valley Institute for Regional Studies. Silicon Valley defined as greater Silicon Valley including San Francisco
⁴ Based on company financial disclosures