Applied Materials, Inc. is sharpening its focus on India’s deal pipeline, with its venture arm, Applied Ventures Llc, intensifying efforts to scout and evaluate deep-tech startups in the country as it shows early signs of maturity, its senior executives told Mint.
The US-based semiconductor equipment major is “spending more energy” tracking opportunities in the country than before, as policy support and early-stage investments begin to translate into a stronger pipeline of startups, said Om Nalamasu, chief technology officer (CTO) of Applied Materials.
“With initiatives like ISM 1.0 (India Semiconductor Mission 1.0), ANRF (Anusandhan National Research Foundation), and RDI (research, development, and innovation) funds, we expect a significant increase in both the number and quality of ideas emerging from India,” he said.
Nalamasu added that the firm is also engaging with government-backed initiatives such as aimed at boosting domestic innovation.
Applied Ventures has joined the India Deep Tech Alliance (IDTA) as a corporate strategic partner, signalling a deeper engagement with the country’s semiconductor and deep-tech ecosystem.
Globally, it has invested over $500 million across more than 100 companies, deploying about $100 million annually across 19 countries. It has seen more than 10 listing exits and multiple mergers and acquisitions.
In India, however, its exposure remains limited so far. One of its early investments, Tessolve, the Bengaluru-based semiconductor engineering firm, was acquired by Hero Electronix. More recently, in 2024, it made a growth equity investment in Gurugram-based electronics product design, software and manufacturing company VVDN Technologies.
Bullish on India
The renewed focus on India is part of a broader evolution in Applied Materials’ presence in the country, which has historically been centred around engineering and design.
Avi Avula, president at Applied Materials India, said the company is now moving up the value chain. “Over time, we have also expanded into product development and research and development. We are moving beyond just engineering and design to actually building products. As the ecosystem evolves, especially with fabs coming up, we expect to support them through sales interfaces and technical capabilities,” he said.
Despite this shift, India’s contribution to the company’s global revenue remains negligible due to the absence of semiconductor manufacturing in the country.
“We sell to fabs like TSMC or Samsung, and since India does not yet have production, revenue from the country is minimal. That will change as fabs come up, such as Tata’s, but for now, India’s role is primarily as a delivery and engineering centre,” Avula said.
India’s for chips is expected to be a key driver of this transition.
“India is expected to become the third-largest economy, and chip demand is projected to exceed $100 billion by 2030. Currently, all of this demand is met through imports,” he added.
The company, which entered India in 2002, is also preparing to deepen its R&D and product development footprint in the country, backed by earlier announced investments. In 2023, Applied Materials committed $400 million over four years to build a new engineering centre in the country.
India for the world
“We are waiting for ISM 2.0 to scale further, which will allow us to expand beyond design into building products and creating intellectual property in India. Over time, this should lead to global product sales originating from India,” Avula said.
Applied Materials also expects its investments to catalyse wider ecosystem growth. “For every dollar we invest, we expect our suppliers to invest five times that amount. This could lead to about $2 billion of ecosystem investment,” he said.
The company has also begun participating in the country’s early semiconductor manufacturing efforts. On 4 December, Mint that Applied Materials, along with the Tata group and other firms, was part of a ₹4,500 crore project to upgrade the Semiconductor Laboratory (SCL) in Mohali to produce more advanced industrial chips.
However, executives cautioned that India’s deep-tech ecosystem remains at an early stage, with structural gaps that need to be addressed. “There isn’t a lack of capital globally, there’s a lack of good ideas,” Nalamasu said, adding that deep-tech innovation requires stronger infrastructure, including labs, manufacturing capabilities and testing environments.
Still, the company believes the country can play a larger role in solving global technological challenges as its ecosystem matures.
“India needs deep-tech for its own growth, but deep-tech also needs India,” Avula said. “There is a large pool of talent that can be deployed to solve global challenges… If even a fraction of India’s talent focuses on deep tech, it can significantly accelerate global innovation.”