The next semiconductor breakthrough may happen between chips.
AMSTERDAM, NETHERLANDS.
Shares in Dutch semiconductor equipment manufacturer BE Semiconductor Industries (Besi) surged more than 10% on Tuesday after US technology group Applied Materials announced plans to increase its ownership stake from approximately 9% to 20%. The investment reinforces a strategic partnership focused on advanced semiconductor packaging, an increasingly important technology for artificial intelligence systems that require greater computing performance without proportionally increasing energy consumption.
The announcement, made on October 26, prompted a sharp response in Amsterdam trading, with Besi shares climbing above €160 by early afternoon. The rally followed a difficult period for the Dutch company’s stock, which had fallen approximately 50% from its June peak of €317 amid wider pressure on semiconductor companies. Applied Materials’ decision therefore arrived at a moment when investors were reassessing both the growth potential and financial risks associated with the artificial intelligence industry.
The American company has entered into an accelerated share purchase agreement to acquire the additional holding. Completion remains subject to the applicable review period under US antitrust legislation, meaning the transaction should not yet be treated as fully executed. Applied Materials described the purchase as a long-term strategic investment and stated that it currently has no intention of increasing its ownership beyond approximately 20% or seeking representation on Besi’s board of directors.
That distinction is important. A larger minority stake strengthens Applied Materials’ financial exposure to Besi without establishing that it intends to acquire the entire business. Under Dutch takeover regulations, crossing 30% of a listed company’s voting rights generally triggers a mandatory offer to other shareholders. The proposed ownership level remains below that threshold, although its commercial significance extends beyond the percentage of shares acquired.
Applied Materials and Besi have collaborated since 2020, particularly on hybrid bonding, a manufacturing process that allows semiconductor components to be connected directly with extremely fine electrical interconnections. Traditional chip packaging frequently relies on microscopic solder connections between components. Hybrid bonding reduces the space required for those connections, potentially improving communication speed, connection density and energy efficiency.
The technology has become increasingly relevant as semiconductor performance encounters physical and economic constraints. For decades, improvements in computing capacity depended heavily on placing more transistors onto individual chips. That approach remains important, but increasing complexity and production costs have encouraged manufacturers to explore architectures that combine multiple semiconductor components within advanced packages.
Rather than relying entirely on a single large processor, chipmakers can integrate specialized components into more complex systems. Advanced packaging allows different functions, including processing and memory, to operate within tightly connected structures. This can reduce the distance that information must travel, potentially improving performance while limiting the energy required to move data between components.
The implications are especially significant for artificial intelligence. Training and operating large AI models require extensive computational resources, while data movement between processors and memory can create performance bottlenecks and substantial electricity demand. Improvements in semiconductor interconnections therefore offer opportunities to increase the efficiency of AI infrastructure without depending exclusively on advances in transistor manufacturing.
For Applied Materials, the investment strengthens its position in a part of semiconductor production that is becoming strategically important. The California-based company supplies equipment and technologies used throughout chip manufacturing, while Besi specializes in assembly and advanced packaging systems. Their complementary capabilities create opportunities to integrate materials engineering, manufacturing equipment and packaging processes more closely.
The partnership took another step forward on October 1, when the companies announced an expansion of their cooperation beyond hybrid bonding into additional semiconductor interconnection technologies. Besi also became an innovation partner at Applied Materials’ Equipment and Process Innovation and Commercialization Center, known as the EPIC Center, in Silicon Valley. The collaboration is intended to accelerate development and help manufacturers address technical challenges associated with increasingly sophisticated chip architectures.
Prabu Raja, president of Applied Materials’ Semiconductor Products Group, linked the expanded investment to the growing importance of advanced interconnection technologies for energy-efficient AI computing. His remarks reflect an industrial assessment that semiconductor performance is increasingly influenced by how components are assembled and connected, rather than only by the capabilities of individual chips.
This technological transition carries substantial commercial implications. Advanced packaging can influence manufacturing costs, production yields, supply-chain relationships and the pace at which new processors reach the market. Equipment manufacturers that establish strong positions in these processes may benefit from increased demand as chipmakers invest in next-generation architectures. However, potential demand does not guarantee immediate revenue growth, particularly when adoption schedules and capital expenditure decisions remain uncertain.
Besi’s recent share-price volatility illustrates that uncertainty. The company’s technology may occupy an important position in future semiconductor manufacturing, but market valuations also reflect expectations about customer investment, equipment orders and the timing of industrial adoption. A strategic investment by a major industry participant can strengthen confidence without eliminating the commercial risks associated with emerging manufacturing processes.
The transaction also has an international regulatory dimension. Both companies maintain substantial commercial connections with China, making geopolitical and competition considerations relevant to any future expansion of their relationship. Approximately 30% of Applied Materials’ 2025 revenue originated in China, while Besi operates a manufacturing facility in Leshan, Sichuan province.
These connections could complicate a hypothetical full acquisition, although no such transaction has been announced. In 2021, Applied Materials abandoned its proposed purchase of Japan’s Kokusai Electric after the necessary Chinese regulatory approval was not obtained before the transaction deadline. That precedent demonstrates how semiconductor industry consolidation can be affected by regulatory jurisdictions extending beyond the countries where the participating companies are headquartered.
China’s role is particularly consequential because the global semiconductor industry combines highly specialized technologies with geographically dispersed manufacturing, equipment supply and customer relationships. Companies seeking closer integration must consider not only industrial compatibility and financial returns, but also export controls, national security concerns and competition regulations.
For the Netherlands, Besi represents part of a technologically significant semiconductor equipment sector that also includes ASML and other specialized manufacturers. European suppliers occupy important positions within international chipmaking despite the geographic concentration of much semiconductor production in Asia. Continued investment in advanced manufacturing processes can reinforce that industrial relevance, although ownership changes and strategic partnerships introduce additional questions about technological dependence and corporate autonomy.
The significance of Applied Materials’ decision ultimately lies in the relationship between financial capital and technological capability. The company is increasing its economic commitment to a partner whose equipment may become increasingly important as artificial intelligence systems demand more complex semiconductor architectures. Whether that commitment delivers attractive returns will depend on technical execution, customer adoption and the economics of manufacturing at scale.
The market’s immediate enthusiasm should therefore be distinguished from the longer-term industrial outcome. Besi has secured a stronger commitment from an established semiconductor equipment supplier, but the future commercial importance of hybrid bonding will be determined by actual production requirements and investment decisions across the chip industry.
As artificial intelligence transforms demand for computing infrastructure, competition is expanding beyond the development of faster processors. The ability to connect, package and manufacture semiconductor components efficiently is becoming a critical part of technological progress. Applied Materials’ deeper investment in Besi reflects that shift, revealing how some of the industry’s most consequential developments may occur not inside individual chips, but in the engineering that brings them together.
Beyond the Numbers, the Consequences.