September 27, 2001 – Danvers, MA – Applied Materials – in a significant boost for the state’s high-tech economy – one of the world’s leading producers of semiconductor equipment, will set up a manufacturing operation in the former Osram Sylvania light bulb plant in Danvers.
Acting Governor Jane Swift will be on hand Thursday, September 27, at the plant this morning to welcome the Santa Clara, CA semiconductor equipment maker to the Bay State, according to the Boston Globe.
The company will lease the entire 280,000-square-foot site, which Sylvania closed three years ago, to produce a line of ion implantation machines also named Swift. Ion implantation machines, custom-built devices that can cost several million dollars each, add dopants to the silicon wafers used to make microchips.
An Applied Materials spokesman said that the new plant will employ “several hundred” workers over the next several years.
The move by Applied Materials will make Massachusetts the world center for ion implantation machines. The state is already the home to the two leaders in this market segment, Gloucester’s Varian Semiconductor Equipment Associates, and Beverly-based Axcelis Technologies.
“The Boston area, that is where the whole technology was originally developed,” said Risto Puhakka, vice president of VLSI Research, San Jose, CA.
The presence of other established semiconductor-equipment makers was a key reason that Applied Materials decided to set up shop in Massachusetts, said company spokesman Steve Taylor.
“There’s an established base of high-quality suppliers, services, sub-assemblies,” Taylor said. “You have a good business climate here, a good high-tech environment.” Kristine Graney Foye, spokeswoman for the Massachusetts Department of Economic Development, said her agency worked closely with Applied Materials to bring the company to the state.
Foye told the Boston Globe the company isn’t receiving any special tax incentives, but that it was attracted by state tax policies, such as a rule that taxes companies only on sales made inside the state. Because most of Applied Materials’ customers are based outside of Massachusetts, this rule substantially eases the company’s sales tax burden.
Applied Materials launched the Swift line last year, in an effort to boost its share of the ion implantation business. The company presently makes the machines at a factory in Horsham, England, but the site had no room for a major expansion.
By opening a new factory at a time during a severe downturn in the chip industry, Applied Materials is betting that it’ll be well positioned for an eventual turnaround.
Indeed, in a speech this week at Harvard University’s Kennedy School of Government, Semiconductor Industry Association president George Scalise predicted that chipmakers have hit bottom and are ready to rebound early next year.
“In this industry you need to look far ahead of the current business conditions,” said Puhakka of VLSI Research. “If anything, this is the time to spend the money, to be prepared for the next upturn.”