Applied Materials to hire 500 for China R&D center

Applied Materials, the world’s largest maker of semiconductor production line equipment, Wednesday said it will hire as many as 500 people in China to staff a new research and development center.

The company, which broke ground on its new Global Development Capability (GDC) center in Xi’an, China last week, said it has already hired 20 staff for the center, which is aimed at developing chip manufacturing technology.

“Xi’an offers us a number of benefits including several top universities that will supply the talent we need, a cooperative local government and lower operating costs than some other regions in China,” said David Miller, a spokesman for Applied Materials, in an e-mail.

The company will support customers in Shanghai, Beijing and Wuxi using its sales teams, he added. Most of China’s chip plants are located in these three cities, not in Xi’an.

He declined to say how much money Applied Materials is investing in the GDC center.

The new 106,000-square-foot facility, which sits on 25 acres of land, will specialize in improving 200-millimeter (8-inch) semiconductor equipment, Applied said. Most of China’s chip factories use the older, eight-inch technology. Only one Chinese company, Semiconductor Manufacturing International Corp. (SMIC), operates advanced 300mm (12-inch) production lines.

The company focuses most of its 300mm technology development efforts at a facility in Santa Clara, California, Miller said.

The China center is only one of a few globally. Applied has another GDC center in India, where it employs several hundred engineers who focus on products and support. But the company does not have such centers in major chip equipment markets such as Taiwan or South Korea, which normally spend billions of dollars each year on Applied’s machinery.

The company has operated in China since 1984 and currently employs around 400 people in Shanghai, Beijing, Tianjin, Wuxi, Suzhou and Kunshan.

China is expected to be one of the fastest growing markets for semiconductor equipment in the world, with an annual growth rate between 2003 and 2008 projected at just over 24 percent per year, according to Applied.

However, there have been some bumps on the country’s road to chip production greatness. Sales of semiconductor equipment to China plunged nearly 51 percent last year to $1.33 billion, from $2.68 billion a year earlier, according to industry group Semiconductor Equipment and Materials International (SEMI).

The global chip equipment market was worth $32.9 billion last year, led by purchases from Japan at $8.2 billion and South Korea with $5.8 billion, according to SEMI.