AI-Driven "Chip Famine" Persists? Applied Materials Partners with U.S. and Korean Giants to Develop Next-Gen Memory

On Tuesday ET, Applied Materials ($AMAT) announced a strategic partnership with memory leaders Micron Technology ($MU) and SK Hynix to co-develop next-generation memory chips optimized for artificial intelligence.

Applied Materials revealed that Micron and SK Hynix will serve as founding partners of its newly established research hub, the Equipment and Process Innovation and Commercialization (EPIC) Center. The collaborative efforts will focus on advancing chip technologies under the EPIC framework.

According to Applied Materials, the EPIC Center represents a $5 billion investment initiative dedicated to semiconductor equipment research and development. Capital expenditures are expected to scale toward this target as specific customer projects commence.

Addressing Surge in AI Chip Demand

The announcement comes as U.S. technology titans—including OpenAI, Alphabet’s Google, and Microsoft—aggressively accelerate their AI infrastructure build-outs. Estimates suggest these industry leaders will deploy at least $630 billion in capital toward AI infrastructure this year alone.

Against this backdrop, global demand for memory has skyrocketed, leading to months of supply tightening and a steady appreciation in chip prices. The world’s three dominant memory producers—Samsung, SK Hynix, and Micron—have all recently issued warnings that they are struggling to meet the voracious market demand for high-performance memory.

Strategic Focus: HBM, DRAM, and 3D Packaging

Applied Materials outlined specific objectives for each partnership:

• With Micron: The strategic focus will be on advancing DRAM, HBM (High Bandwidth Memory), and NAND technologies. This collaboration will integrate the expertise of the EPIC Center with Micron’s primary innovation hub in Boise, Idaho.
• With SK Hynix: The partnership will prioritize material improvements, process integration, and 3D advanced packaging techniques for next-generation DRAM and HBM. These R&D activities will be conducted directly within the EPIC Center.

Applied Materials previously committed up to $4 billion to the research center in 2023, with current projections estimating the facility will be fully operational by 2026.