President Barack Obama is scheduled to pay a visit to Applied Materials Inc. in Austin on Thursday, and Jonathan Davis, vice president for the industry trade group SEMI, said the company is a good choice for inclusion in the president’s “Middle Class Jobs and Opportunity Tour.”
Obama is expected to stop at the company’s manufacturing complex on U.S. 290 Thursday afternoon after visiting Manor’s New Tech High School.
“The president is down there to reinforce his manufacturing and jobs message, and that is entirely consistent with companies like Applied that are promoting competitiveness through advanced manufacturing,” Davis said. “We are delighted to see that happen. Good for Applied and good for Obama.”
Applied Materials continues to be the world’s largest maker of chip manufacturing equipment — advanced machines that perform the precise steps that turn silicon wafers into advanced integrated circuits. The business is challenging — Applied’s profit last year dropped 94 percent in a slow sales year — but Davis said he regards it as one of America’s iconic tech companies competing in a global business.
“They have one of the highest-tech manufacturing facilities you will ever see,” Davis said. “It is really state-of-the-art stuff.”
Applied is a global force in chip manufacturing technology, but its operations in Austin haven’t added substantial numbers of jobs for years.
Applied employs about 2,500 workers in Austin, including both contractors and permanent employees, but that is down by about 2,000 from the end of the dot-com boom at the turn of the century.
In the past decade, Applied has cut back its local employment periodically whenever chip manufacturers have slowed their equipment purchases. Applied has been one of several chip-related companies that have shrunk.
But Austin remains the center for building the most technologically advanced part of its chip equipment.
Applied and Samsung Austin Semiconductor are both key business partners for the Manor Independent School District, where they have backed key programs with volunteer help and financial support.
Samsung also is Applied’s largest global customer, accounting for about 20 percent of its sales last year. Most of Applied’s equipment gets shipped to Samsung factories in South Korea, but a considerable amount of equipment has been shipped a few miles down the road to Samsung’s factory in Northeast Austin, which has seen about $9 billion in new investment over the past eight years.
Industry analyst Brian Matas with IC Insights in Scottsdale, Ariz., said equipment makers like Applied face tougher business challenges nowadays because there are fewer semiconductor companies that can afford to build new factories.
“If you are an equipment supplier, you really have fewer customers to support and keep happy,” Matas said. “There are lots fewer companies that are able to build new facilities than there were 10 years ago. A company like Applied has to do as much as it can to stay relevant with its customers. You have to spend money to court customers and to invest in another generation of technology. If you don’t do it, there is someone waiting in the wings that will.”