Applied Materials India: Accelerating Chip Ecosystem Growth

A chip is built layer by layer. Films a few atoms thick are deposited, patterned, etched away, implanted, polished and measured, hundreds of times. Applied Materials makes the tools for most of those steps. It calls itself a materials-engineering company: its job is to control what is added to and taken off a wafer at atomic scale.

It does not make chips, and it does not make the lithography scanners that print the patterns, which are ASML’s field. That split matters for India. A fab such as Tata’s Dholera plant will buy tools from several makers. Applied’s opportunity is to be one of them, and to build more of the tools’ parts, software and engineering in India.

By revenue Applied is the world’s second-largest chip-equipment supplier, behind ASML. Its biggest product lines are deposition and etch, followed by inspection and metrology, ion implantation, planarisation and, increasingly, packaging tools for AI chips.

The first reason was people. In 2002 Bengaluru offered software, hardware and data engineers at scale. Applied’s Indian teams began with engineering support and grew into product design, simulation and testing. The company now says Indian engineers work on almost every new product it makes.

The second is customers. Until 2023 India had no chip plants to sell to. By September 2026 it had 12 approved units worth about ₹1.64 lakh crore, five of them producing, and a silicon fab due in 2028. Equipment makers follow fabs.

The third is geopolitics. Chip-tool makers are under pressure to spread their engineering and supply chains beyond a few countries. In February 2026 Applied agreed to pay a USD 252 million US penalty over past exports to China. India, with engineers, a government subsidy programme and good relations with Washington, fits the diversification story.

The fourth is policy. Semicon 2.0, approved in July 2026, explicitly funds machines and materials. Two months later Applied’s Vision 2035 put a number on its side of that equation.

A 300-mm wafer is about 12 inches across and holds more than twice as many chips as a 200-mm wafer. Almost all leading-edge and most mature high-volume fabs run on 300 mm, including the Tata-PSMC fab being built at Dholera. An equipment lab that can run 300-mm wafers can test tools and parts under conditions close to a real fab.

That is what the India Validation Center does. It is not a chip factory. A commercial fab runs tens of thousands of wafers a month to sell chips. The IVC runs wafers to prove that a chamber, a part or a process works. Both are needed. Until 2024, the second kind of work on 300-mm wafers had to happen outside India’s private sector.

Applied has also worked with IISc Bengaluru on advanced-materials applications. The pattern is the same in each case. A chip-design engineer can learn on a laptop. A process or equipment engineer needs cleanroom hours, real chambers and real failure modes, and these programmes give students some of that before they reach a fab.

An etch or deposition tool is made of thousands of parts: vacuum pumps, valves, gas-delivery panels, RF power supplies, ceramic and quartz chamber parts, sensors, robots and software. Today almost none of these are made in India for global chip tools.

Applied’s 2023 plan tried to change that by letting suppliers design, test, validate, modify and qualify their parts on Applied’s equipment in Bengaluru. Vision 2035 turns it into a target: ten times the India-based supply-chain capacity by 2035, from Indian suppliers and from global ones that move here.

If it works, the payoff goes beyond Applied. A qualified Indian supplier of chamber parts can sell to other tool makers and to the fabs themselves. That is how clusters in Taiwan, Korea and Singapore were built.

A built research park. The 140-acre site is a commitment in September 2026. The first test is land, construction and cleanrooms on a visible schedule.

Indian parts inside global tools. The 10x supply-chain target should show up as named Indian suppliers shipping qualified components.

Fabs at volume. Equipment ecosystems grow around running fabs. Dholera’s 2028 start and the ramp of India’s packaging plants matter as much as Applied’s own spending.

Engineers who move into fabs. ASCENT, IIT Bombay and the Chennai centre should produce process and equipment engineers, not only software and design talent.

R&D that starts here. The real shift would be new processes and tools invented in Bengaluru and shipped worldwide, which is what Raja meant by “inventions done here must scale globally”.