Chasing peers like Applied Materials, Lam Research Group invests over $1 billion in India's semiconductor industry

According to the Zhitong Finance APP, American semiconductor equipment giant Lam Research (LRCX.US) plans to invest over $1 billion in the Indian market over the next few years. This investment plan was announced during the "Invest Karnataka" initiative led by the Indian government.

It is understood that this leader in the semiconductor equipment field has signed a memorandum of understanding for investment with the Karnataka Industrial Area Development Board.

The Indian government is actively promoting the rapid development of its semiconductor industry through a series of measures, including a significant incentive program of up to $10 billion. Lam Research's investment, following previous announcements by semiconductor equipment giant Applied Materials and memory giant Micron Technology to invest in India, is seen as the latest "major vote of confidence" in the Indian government's vision for the development of the semiconductor industry chain. Previously, Applied Materials and Micron had already announced substantial investments to support the development of India's semiconductor industry.

Other important companies in the semiconductor field are also actively leveraging government subsidies to make significant investments in the Indian semiconductor market to support the construction and development of the local semiconductor industry chain. For example, NXP Semiconductors (NXPI.US) plans to invest $1 billion to double its R&D investment and employee scale in India.

Before Lam Research announced its investment in the Indian semiconductor market, another American semiconductor equipment giant, Applied Materials (AMAT.US), had already laid out plans for the Indian market. In 2023, Applied Materials announced it would invest $400 million over the next four years to establish a new engineering center in India. Applied Materials currently operates six sites in India and collaborates closely with renowned institutions in the country, such as the Indian Institute of Science and the Indian Institutes of Technology.

Memory giant Micron Technology (MU.US) has begun construction of a $2.75 billion chip packaging and testing factory in Sanand, with reports indicating that 50% of the construction funds will come from the Indian central government, 20% from the state of Gujarat, and Micron will invest approximately $825 million.

Lam Research and Applied Materials are ubiquitous among major chip manufacturers globally. Unlike ASML, which focuses solely on lithography, the high-end equipment provided by Lam Research and Applied Materials plays a crucial role in nearly every step of chip manufacturing. Their products cover the most important chip-making processes, including Atomic Layer Deposition (ALD), Chemical Vapor Deposition (CVD), Physical Vapor Deposition (PVD), Rapid Thermal Processing (RTP), Chemical Mechanical Polishing (CMP), wafer etching, and ion implantation.

Currently, global demand for AI chips remains strong, and this explosive demand is expected to continue until 2026. As a result, chip manufacturers such as TSMC, Samsung, and Intel are fully expanding their production capacity. Additionally, memory giants like SK Hynix and Micron are expanding their HBM capacity, all of which require large-scale procurement of semiconductor equipment needed for chip manufacturing and advanced packaging. Some core equipment even needs to be updated. After all, AI chips have higher logic density, more complex circuit designs, and greater power and precision requirements for equipment, which may lead to higher technical requirements in lithography, etching, thin film deposition, multilayer interconnection, and thermal management, thus necessitating customized semiconductor manufacturing and testing equipment to meet these demands