Applied Materials works to bring global suppliers to India

Visitors gather at Applied Materials and Micron Technology kiosks before the start of 'SemiconIndia 2023', India's annual semiconductor conference, in Gandhinagar, India, July 25, 2023. REUTERS/Amit Dave

NEW DELHI, Aug 4 (Reuters) - Applied Materials (AMAT.O) wants its suppliers from Europe, Japan and elsewhere to set up operations in India, as the semiconductor toolmaker works to expand the local supply chain, its India head told Reuters.

India is a key market for U.S.-based Applied Materials where the firm plans to invest $400 million over coming years in a new engineering centre in the tech hub of Bengaluru. The centre will focus on developing technology for chipmaking tools.

Srinivas Satya, president of Applied Materials India, in an interview said the firm attracted as many as 25 of its suppliers from Japan, South Korea, the U.S. and Europe to a flagship semiconductor event in Gujarat last week to assess the market, with multiple states pitching to those firms to set up base.

Applied Materials does not manufacture in India - and has no plans to - but having suppliers based locally will help its new engineering centre speed up technology development and testing.

"Having the suppliers closer to us is so important just to accelerate our product learning cycle. We want to introduce a much broader set of products, much faster," said Satya.

"We can accelerate how these technologies get adopted into our high volume manufacturing solutions."

Prime Minister Narendra Modi's government has been courting investment for India's nascent chip sector with aspirations to develop a chipmaking hub.

Though a major chip manufacturing deal has yet to be signed, Advanced Micro Devices (AMD.O) last week announced plans to set up a chip design centre in India, while Micron Technology (MU.O) has said it will invest $825 million in a semiconductor testing and packaging unit.

Such investment creates opportunities for Applied Materials, the world's biggest maker of tools used in manufacturing chips.

"As and when Micron and other global players or domestic players set up their manufacturing plants here, Applied will certainly be ready to support those," Satya said.

Modi met Applied Materials CEO Gary Dickerson in Washington in June and invited the company to strengthen the chip industry in the south Asian nation.

Applied Materials started its India operations in 2002 and has about 7,500 employees in the country working in product development, software and other business operations.

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Munsif Vengattil is a Reuters' India technology correspondent, based in New Delhi. He tracks how policymaking is influencing the business of tech in India, and how the country is now vying more aggressively to be a powerhouse in the global electronics supply chain. He also regularly reports on big tech giants, including Facebook and Google, and their strategies and challenges in the key Indian market.