Silicon Valley has built some of the world’s most impressive and valuable companies, with names like Apple, Alphabet, and Meta, worth trillions of dollars apiece.
When it comes to building the actual facilities where chips, computers, and other game-changing innovations are created, however, America’s tech capital has much less to show. Most chip facilities are now located overseas or out of state, and the most striking thing about Silicon Valley’s landscape of low-slung buildings and office parks is just how unimposing it is.
That makes what Applied Materials—the world’s largest chipmaking equipment producer—did on Monday so unusual. The 59-year-old company officially unveiled its new EPIC semiconductor research and development facility, a two-year construction project located at Applied Materials’ Sunnyvale, Calif. campus, just down the road from its headquarters.
Quite simply: it’s the biggest thing around.
The massive 600,000-square-foot structure of glass, concrete, and steel (two Eiffel Towers’ worth of steel, according to the company), looms over its environment like a spaceship from another world.
The idea behind the facility is equally bold. The $5 billion EPIC center was built in partnership with some of the world’s top chip industry players, including Intel, TSMC, Micron, SK Hynix, and Samsung. The companies will each have teams of researchers on-site, working alongside Applied Materials’ engineers and getting early access to Applied Materials’ newest equipment, to develop advances in microprocessors and memory chips.
Applied Materials described EPIC as the largest-ever U.S. investment in advanced semiconductor equipment R&D, with total capital investment expected to reach $5 billion when all is said and done. The facility’s so-called clean rooms, in which bunny-suit wearing researchers operate machines that etch microscopic circuits into silicon wafers, will occupy the space of three football fields. Within that space, competing companies—like memory chip companies Micron and SK Hynix—will have their own private test facilities, crammed with advanced chipmaking gear, where they will work directly with dedicated teams from Applied Materials.
“Having innovators co-located together, having earlier access to the technologies that enable new AI architectures, is a complete game changer,” said Applied Materials CEO Gary Dickerson in an interview with Fortune at the event.
According to the company, the collaboration at EPIC will speed up the time it takes to develop each new generation of chip architectures, cutting the typical “concept to commercialization” timeframe from 10 to 12 years to as little as six years.
Applied Materials
The ability to understand what’s technically feasible earlier on in the process increases the chance of breakthroughs and hopefully reduces the number of dead ends that researchers go through. Until companies collaborate in the lab, Dickerson said, “they don’t know what they don’t know.”
The EPIC center is purely for research, not for commercial production of chips—so it’s not, in itself, likely to bring chip manufacturing back to the U.S. But it represents an important step in keeping Silicon Valley—and Applied Materials—at the forefront of cutting-edge chip technologies, a critical weapon in the race to develop ever more powerful AI models.
A reminder of the stakes was on display Monday as CXMT, a memory maker in China, announced a breakthrough in memory chip density. The breakthrough, if substantiated, could allow CXMT to produce more power-efficient memory chips, beating Samsung and SK Hynix to the milestone. The news sent shares of both companies down roughly 7% and 10% respectively in South Korea, according to Bloomberg.
The U.S. government has barred the sales of advanced GPU chips and advanced chipmaking equipment to China, in an effort to deprive the country of the computing brawn necessary to create AI models capable of outperforming models made by U.S. companies like OpenAI, Anthropic, and Google. Dickerson repeatedly invoked “winning the AI race” at Monday’s event, though he would not comment specifically on his views about U.S. regulations on sales to China. (In February, Applied Materials paid $252 million to settle a case with the U.S. Department of Commerce that accused the company of shipping equipment to China that did not comply with U.S. export restrictions.)
Founded in 1967 as a chemistry supply company to serve the then nascent semiconductor industry, Applied Materials has grown into the world’s largest provider of chip making equipment. The company has been a major beneficiary of the AI boom and the resulting shortage of memory chips, with its shares up more than 110% over the past 12 months. In August, the company reported $9.12 billion in quarterly revenue, up 25% year-over-year, and the company has said it has visibility into customer demand as far as 2030.
Given the memory chip industry’s history of boom and bust cycles, some industry observers worry that overinvesting by both chipmakers and chip equipment makers could pose a risk if demand drops. Visibility into customers’ future demand, they say, is not the same as signed contracts.
Dickerson said the new products and services that companies are developing to take advantage of AI give him confidence that demand for chips, and for improvement in the performance and the power efficiency of chips, is only going to increase.
“This is moving so quick,” he said. “There’s never been an inflection like this in our lifetimes.”
