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The US-based company expects to maintain at least a 20 percent share of the semiconductor equipment manufacturing market in the Chinese mainland, where chip makers are rapidly raising investment to build new lines or expand capacity, Mike Splinter, president and CEO of Applied Materials, said during an exclusive interview.

Scheduled to announce the project on Friday, the company plans to spend US$33 million on the initial phase of the project. It will spend about US$50 million on the development center in the next two to five years.

"More firms, such as Hynix and TSMC (Taiwan Semiconductor Manufacture Corp), are building plants in the Chinese mainland. It is an opportunity for us," said Splinter, who attended Semicon China 2007 in Shanghai yesterday.

The Xi'an center will provide technical support to Applied Materials' clients in the Chinese mainland and will conduct research and test work.

After experiencing negative growth in 2005, the China market grew the most in 2006, soaring over 74 percent year on year to US$2.3 billion, according to SEMI, a US-based research firm.

Splinter expects the market size to jump to US$4 billion in 2010 and says most demand is for equipment for 12-inch wafer plants, which allows firms to cut chips more economically compared with current eight-inch plants.

The company will keep the No. 1 position in China and the market share here is much higher than the global level of 20 percent, Splinter said.

Meanwhile, the company has expanded into the flat panel display and solar equipment market.

FPD-related business contributed US$1 billion to the company's total revenue of US$9.2 billion last year.

Solar-related panel equipment revenue is expected to contribute US$500 million to the Applied Materials' revenue in the near future, according to Splinter.

(For more biz stories, please visit Industry Updates)