Applied Materials' Prabu Raja Says $5 Billion India Investment to Drive Global R&D

Applied Materials Plans $5 Billion India Investment

US semiconductor equipment maker Applied Materials is planning to invest around $5 billion in India over the next decade, with a significant portion of the programme focused on research and development, semiconductor engineering and supply-chain expansion.

The investment is being made under the company's Applied Materials India Vision 2035, announced at SEMICON India 2026. The strategy is designed to integrate India's semiconductor capabilities more closely with Applied Materials' global operations and the wider semiconductor value chain.

Prabu Raja, president of Applied Materials' Semiconductor Products Group, told Economic Times that the company plans to develop products in India that can eventually be supplied to advanced semiconductor fabs around the world.

This represents a shift from viewing India primarily as a location for engineering and design work towards giving the country's operations a larger role across the product-development lifecycle.

Bengaluru to Get 140-Acre Advanced Semiconductor Research Park

A major component of the investment plan is a proposed 140-acre Advanced Semiconductor Research Park in Bengaluru.

The facility is expected to bring together cleanroom capabilities, engineering infrastructure and collaborative R&D involving Applied Materials, customers and suppliers.

The research park is intended to build on the company's existing semiconductor engineering presence in India and create an environment where new equipment and technologies can be developed and tested.

The proposed facility is particularly significant because semiconductor equipment development requires specialised laboratories and access to advanced wafer-processing capabilities.

From India Design to Global Product Development

Raja's comments indicate that Applied Materials wants India's role to extend beyond designing components or supporting existing products.

The company's objective is to use Indian engineering capabilities across a broader product lifecycle, including innovation, design, development, sourcing and customer support.

The products developed through these operations could subsequently be supplied to semiconductor fabs globally.

This approach would place India closer to the centre of Applied Materials' global product-development network rather than limiting its role to a regional engineering centre.

Three Pillars of Applied Materials India Vision 2035

Applied Materials' India strategy is built around three major areas:

PillarFocusDeepen R&DExpand semiconductor research, engineering and product-development capabilitiesAccelerate the ecosystemBuild local supply-chain capacity and integrate Indian suppliers into global operationsGrow future talentDevelop specialised semiconductor engineering, manufacturing and technical skills

Raja said the three-pillar strategy is intended to accelerate India's semiconductor ecosystem while connecting it to the global value chain.

India Supply-Chain Capacity to Grow Tenfold

Supply-chain development is another major part of the $5 billion programme.

Applied Materials aims to increase its India-based supply-chain capacity tenfold by 2035.

The company plans to create more opportunities for Indian suppliers while also encouraging global suppliers to establish or expand operations in India.

The objective is not limited to sourcing individual components. The company is looking to progressively develop capabilities involving more complex modules and subsystems for its global operations.

The expansion could therefore create opportunities for Indian companies in precision engineering, manufacturing, semiconductor equipment components and specialised industrial technologies.

R&D Workforce to More Than Double

Talent development is the third major pillar of the programme.

Applied Materials plans to more than double its R&D workforce in India by 2035, according to reporting on the company's investment plans. The company already employs more than 7,000 people in India.

The company is also working with Indian universities and institutes to develop specialised semiconductor skills.

Training initiatives include certification programmes and partnerships intended to create engineers and technicians capable of working with advanced semiconductor equipment and manufacturing processes.

Applied Materials Already Has a Semiconductor R&D Base in India

Applied Materials has operated in India for more than two decades and has gradually expanded its engineering and research presence.

In 2024, the company commissioned its India Validation Center in Bengaluru, where it demonstrated the ability to process 300mm wafers.

The facility supports equipment validation, process engineering and product-development activities. It provides a foundation for the company's planned expansion of semiconductor research and engineering in India.

The new research park would significantly expand this existing infrastructure.

What Does Applied Materials Actually Make?

Applied Materials is a semiconductor equipment and materials-engineering company rather than a chip manufacturer.

Its technology is used by semiconductor manufacturers during different stages of chip production.

Semiconductor fabs rely on specialised equipment for processes such as deposition, etching, inspection and other manufacturing steps.

Therefore, Applied Materials' investment in India is focused on strengthening the equipment, engineering, research and supplier ecosystem that supports chip manufacturing rather than establishing a chip fabrication plant itself.

Why AI Is Driving Semiconductor Equipment Demand

The investment comes at a time when global semiconductor demand is being supported by the rapid expansion of artificial intelligence infrastructure.

AI data centres require large quantities of advanced computing chips, creating demand for additional semiconductor manufacturing capacity.

This has encouraged chipmakers and equipment suppliers to expand their global manufacturing and research networks.

Applied Materials is positioning its Indian operations to participate in this broader expansion by developing products and technologies that can serve semiconductor fabs internationally.

India Wants a Larger Role in the Global Semiconductor Industry

India has been trying to build a semiconductor ecosystem spanning chip design, fabrication, packaging, equipment, materials and supporting industries.

The government estimates that India's semiconductor consumption could reach $110 billion by 2030, compared with roughly $45-50 billion in 2025.

The country has also committed substantial government support to semiconductor projects.

However, India is still developing large-scale fabrication capabilities. Reuters reported that while several chip-packaging facilities have begun commercial production, India had yet to produce chips from a large-scale fabrication facility as of the September 2026 report.

Applied Materials' investment therefore adds another layer to the ecosystem by strengthening equipment technology, R&D and suppliers.

Infrastructure and Ecosystem Remain Key Challenges

Applied Materials India president Avi Avula said the bigger challenge for India's semiconductor ambitions is not demand but the development of the ecosystem and infrastructure required to support fabs.

He noted that more than 100 fabs are being built globally and that companies involved in constructing fabs are themselves facing capacity constraints.

This highlights the scale of the challenge facing India.

Building a semiconductor ecosystem requires more than a fabrication plant. It requires reliable suppliers, specialised chemicals and materials, precision engineering, cleanroom infrastructure, skilled workers, logistics and advanced testing capabilities.

Research Park Could Connect Customers and Suppliers

The proposed Bengaluru research park is expected to bring several parts of this ecosystem together.

Applied Materials plans to provide cleanroom capabilities and engineering infrastructure while working with customers and suppliers on collaborative research.

Such a model could allow equipment technologies to be developed and tested closer to the companies that ultimately use them.

It could also help Indian suppliers gain exposure to the technical standards required by the global semiconductor industry.

India Could Become a Global R&D Base

The long-term significance of the investment lies in the possibility of India becoming an important R&D and engineering hub for Applied Materials' global operations.

Instead of products being designed elsewhere and only supported by Indian teams, the company is planning to develop technologies in India that can be deployed internationally.

This could increase India's role in the semiconductor value chain from engineering support to global product innovation and development.

What the Investment Could Mean for Indian Suppliers

The tenfold supply-chain expansion target could create opportunities for Indian companies that can meet the semiconductor industry's stringent requirements.

Potential areas include:

• Precision engineering

• Semiconductor equipment components

• Advanced manufacturing

• Automation

• Industrial systems

• Engineering services

• Equipment modules and subsystems

• Testing and validation

• Specialised manufacturing

However, suppliers will need to meet demanding requirements for quality, reliability, consistency and delivery.

Talent Development Will Be Critical

India already has a large technology and engineering workforce, but semiconductor manufacturing requires specialised skills that are different from conventional software and IT capabilities.

Applied Materials' training initiatives are therefore intended to build expertise in areas such as semiconductor equipment, cleanroom operations, manufacturing processes and advanced engineering.

The company is working with universities and institutes to develop specialised coursework and certification programmes.

This could help address one of the long-term constraints on India's semiconductor ambitions: the availability of engineers and technicians with hands-on manufacturing expertise.

What Comes Next for Applied Materials in India?

The next phase will involve expanding existing R&D infrastructure, developing the proposed research park and building the supplier ecosystem.

Applied Materials also plans to expand its innovation presence in cities including Chennai and Mumbai and is considering a customer-support centre in Gujarat, according to reporting on the company's plans.

The company's investment programme is planned through 2035, making it a long-term expansion rather than a short-term capacity addition.

Bottom Line

Applied Materials' planned $5 billion investment in India over the next decade represents a significant expansion of the company's R&D, supply-chain and talent-development activities in the country.

The proposed 140-acre Advanced Semiconductor Research Park in Bengaluru will be a central part of the strategy, bringing together cleanroom facilities, engineering capabilities and collaborative research.

The company also aims to increase its India-based supply-chain capacity tenfold and more than double its R&D workforce by 2035.

For India, the investment adds depth to the country's semiconductor ambitions by strengthening equipment research, supplier capabilities and specialised talent. For Applied Materials, the strategy could make India an increasingly important source of technologies and products for its global semiconductor customers.

The key test will be how quickly the planned research infrastructure, supplier network and talent pipeline can scale and translate into products that are successfully deployed across the global semiconductor industry.