Dutch provider of key semiconductor technology ASM International is expanding its operations in Arizona with plans to invest$324 million over five years to build a new headquarters in Scottsdale. The state-of-the-art facility will focus on technology development, research, design and engineering capabilities, as well as conduct work on manufacturing capacity, the company said.

The new facility will be built on a 20-acre campus, adding about 500 jobs to the 800 people that the company already employs in the region, according to a press release. The firm, based in the Netherlands, was one of the first semiconductor makers to operate in Arizona and has had its US headquarters in Phoenix since 1976.

ASM is a top global player in the wafer fabrication equipment (WFE) market, with Gartner ranking them at seventh for market share in 2022. The company offers several product categories, including atomic layer deposition (ALD) tools, epitaxy, and furnaces.

However, ALD tools, which chipmakers use to deposit thin films during chip fabrication, is by far their most important product set, said Gaurav Gupta, VP analyst, emerging technologies and trends at Gartner. In 2022, ALD tools contributed to more than 70% of system sales for the company, which claimed a 48% share in the market for ALD - one of the fastest-growing segments of WFE, according to Gartner.

"ALD will be extremely significant for leading-edge nodes as it provides the uniformity/control/conformality of the thin films that are deposited with this technology," Gupta said.

Keep Your Customers Close

The investment in the new facility shows ASM doubling down, literally, on its push to expand its global footprint even amid a growth slowdown in the semiconductor industry. The new North American headquarters will cover 250,000 square feet, which is more than double the size of its current facility in Arizona.

In a comment to Reuters, ASM CEO Benjamin Loh said the decision to expand in Arizona came from the company's current presence there as well as the importance of the region for semiconductor manufacturing.

Intel and TSMC - two of ASM's largest customers-both have a number of manufacturing facilities in Arizona - with a facility that TSMC plans to open early next year even earning a visit from President Joe Biden.

"Arizona is becoming a hub for semiconductor manufacturing, so makes a lot of sense for ASM to expand operations in Arizona," Gartner's Gupta said. "This is typical for WFE players as a strategy to expand closer to where their major customers are building [facilities] and expanding."

Indeed, Loh said that an expanded presence in the state will allow ASM to "work directly with [customers] on the next semiconductor innovations."

The new facility will unite a variety of AMS business functions under one roof for more efficient collaboration between various departments, the company said. These will include some of ASM's global operations and corporate support functions such as supply chain, manufacturing engineering, a global training center, and the company's global software team.

The facility also will include equipment and infrastructure to support ASM's sustainability efforts, including investments in renewable energy, a water recycling facility, and other features. As part of this strategy, ASM also is partnering with two local environmentally minded organizations - The Nature Conservancy and the Arizona Sustainability Alliance -on initiatives to preserve the state's irrigation systems and forests, respectively.