Applied Materials is exploring the possibility of setting up operations in proximity to emerging semiconductor manufacturing sites in Dholera and Sanand in Gujarat, or Morigaon in Assam. The move is part of the company's strategy to stay close to its customers and capitalise on the expected growth as semiconductor factories begin to establish themselves in India, company executives informed the source.

The company anticipates a "second level of growth" as its customers start building factories in India. The Indian government has approved incentives for five semiconductor projects so far, with four in Gujarat and one in Assam. Applied Materials emphasised that a robust supplier base, necessary infrastructure, and attractive incentives are crucial for the semiconductor ecosystem to thrive in India.

Prabu Raja, President-Semiconductor Products Group, Applied Materials, highlighted the importance of proximity to suppliers for efficiency and speed. He noted that India's lower costs and available talent make it an appealing location. Raja also suggested that India should enhance its incentives for suppliers. He pointed out that current subsidies are modest compared to what is offered in other countries and advocated for more competitive incentives to attract suppliers.

Despite this, Raja acknowledged that India’s cost advantages are significant, and while incentives are important, they are just one factor in the decision-making process. Improved incentives would further enhance the attractiveness of India as a semiconductor hub.

(ET)