When Applied Materials brought ASTRA, its Applied Startup Technology & Research Accelerator, to Singapore for the first time this year, it marked more than a regional expansion. It signalled that Southeast Asia’s deeptech ecosystem has matured enough to bridge the gap between breakthrough technology and industrial deployment, a challenge now defining the AI era.
Behind that bet is Applied Ventures, the semiconductor equipment giant’s corporate venture arm, which manages a portfolio exceeding US$400 million across more than 90 companies worldwide.
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In this interview, Abhishek Sud, Senior Investment Director at Applied Ventures, unpacks why Singapore, Taiwan, South Korea, and India are generating the region’s most compelling deal flow, how AI is reshaping capital allocation towards photonics, robotics and energy-efficient computing, and why deeptech investing demands a patience most pure-play VCs simply cannot afford.
ASTRA came to Singapore for the first time this year. Why now, and what about Southeast Asia’s deeptech ecosystem made the timing right?
ASTRA goes where we see the greatest opportunity to accelerate deeptech innovation, and Singapore’s ecosystem has reached the level of maturity that made this the right time. As AI reshapes industries, the challenge is no longer building breakthrough technology; it’s bringing that technology into real-world manufacturing. ASTRA exists to bridge that gap by connecting startups, industry leaders, ecosystem partners and customers.
Southeast Asia has changed considerably in three years: semiconductor investment has grown, engineering capabilities have deepened, and the deeptech startup scene is far more vibrant. Singapore sits at the heart of that momentum, combining world-class research, advanced manufacturing, semiconductor expertise and strong public-private partnerships as a regional hub for Applied Materials’s R&D and commercialisation activities.
Applied Ventures has invested in 18 countries. Where in Asia are you seeing the most compelling deal flow, and which markets have the greatest untapped potential?
We’re seeing strong momentum in Singapore, Taiwan, South Korea and India, where deep expertise in semiconductor and advanced-manufacturing capabilities keeps generating compelling opportunities.
Singapore has become a nexus for innovation and venture activity in Asia, underpinned by a stable, business-friendly tax and regulatory environment, strong legal and financial institutions, and regional connectivity. This is why so many venture firms have chosen to headquarter here. In robotics, companies like Augmentus exemplify the Singapore-based innovation we find compelling.
India is also emerging as an important source of innovation, driven by exceptional engineering talent, an electronics manufacturing base and a fast-growing deep-tech startup ecosystem; companies like VVDN represent this momentum. More broadly, we’re seeing exciting developments across Southeast Asia in AI, robotics, photonics and advanced manufacturing.
Abhishek Sud, Senior Investment Director at Applied Ventures
As investors, we focus less on geography and more on whether an ecosystem brings together talent, research, manufacturing capability and customer demand. That combination is what lets startups move from breakthrough ideas to real industry adoption.
How does Asia’s deeptech VC landscape structurally differ from the US — in founder quality, exit pathways and corporate willingness to be early customers?
The US has one of the world’s most mature venture ecosystems, with deep capital markets and established pathways to scale. Asia is different — not one market but a collection of innovation ecosystems, each with its own strengths.
For us, the defining characteristic of a strong ecosystem isn’t geography; it’s the ability to turn breakthrough research into real-world adoption. What distinguishes many Asian markets is how closely research, manufacturing and industry are connected. Much of the world’s advanced manufacturing capacity sits in Asia, so founders here often get direct access to foundries, manufacturing partners and strategic customers earlier than they would elsewhere.
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That proximity accelerates how quickly a deeptech company can validate and commercialise its technology, and it’s part of why we’re seeing an increasingly sophisticated pipeline of founders tackling hard problems in AI, semiconductors, photonics, robotics and advanced manufacturing. It also shapes exits, with strategic partnerships and acquisitions by Asian companies playing a prominent role alongside traditional venture outcomes.
You manage a portfolio of over US$400M across 90+ companies. With AI demanding more capital-intensive bets, how are you investing in this AI economy?
AI is influencing where capital flows, but it hasn’t changed our investment philosophy. We view AI as an infrastructure transformation and continue focusing on foundational technologies enabling the next generation of computing: energy-efficient compute, photonics, advanced packaging, thermal management and AI data centre infrastructure, all areas aligned with Applied Materials’s expertise across the materials-to-systems stack.
Beyond digital AI infrastructure, we’re also seeing the emergence of Physical AI, where foundation models converge with robotics, automation and industrial systems, as well as quantum computing and AI for science and engineering. ASTRA Singapore is one way we engage with innovators at this intersection, giving us early insight into emerging technologies.
Our objective is not simply to invest in the current AI cycle, but to identify the technology inflections that will shape the semiconductor and AI industries over the next decade.
Selectivity means more companies don’t get funded. What does that mean for early-stage hardware or materials founders who need early institutional backing?
Greater selectivity raises the bar, especially in hardware and materials, where scaling innovation takes significant time and capital. We look beyond technical novelty to understand the problem being solved and whether there’s a credible path to industrialisation and mass deployment, which is often where our model differs from traditional financial VCs.
Minds.ai and Sigray illustrate this well. Minds.ai applies reinforcement learning and deep learning to optimise semiconductor fab operations; Sigray pioneers synchrotron-grade x-ray systems for materials characterisation.
Both are deeply specialised, hard-tech businesses that traditional financial investors may find challenging to evaluate given their technical complexity and development timelines. We engaged because we understood the problems they were solving and their relevance to the broader semiconductor ecosystem. Over time, both technologies became sufficiently important to Applied Materials’ long-term roadmap that the companies were ultimately acquired.
You’re moving into photonics, robotics and quantum computing, areas with historically optimistic timelines. What’s changed that makes these bets fundable now?
Less has changed than you might expect. Deeptech innovation has always followed the realities of physics, manufacturing readiness and customer qualification, not consumer adoption cycles or market sentiment.
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Photonics illustrates this well. We recognised its potential early through our investment in Ayar Labs and have continued building that thesis as the technology matured, including through Mixx Technologies. As AI infrastructure scales, faster, more energy-efficient data movement is becoming increasingly important.
Similarly, robotics is attracting attention as manufacturing environments become too complex for traditional automation, creating demand for adaptive, AI-enabled systems that handle variability and real-time decision-making — the thesis behind our investment in Augmentus, a Singapore-based robotics AI software company actively engaged with our Worldwide Operations group.
We don’t invest because timelines have suddenly become shorter. We invest when we see technologies reaching an inflection point where advances in science, engineering and market demand begin to reinforce one another.
What threshold separates genuinely transformative energy-efficiency plays from incremental improvements dressed up in the right language?
The real question isn’t whether a technology touches power consumption, but whether it meaningfully improves performance-per-watt at the system level, not just in one isolated component.
Our industry has historically delivered roughly a threefold improvement in energy-efficient performance every two years, largely through transistor- and interconnect-level advances. But at today’s density, leading-edge chips packing hundreds of billions of transistors into an area smaller than a postage stamp, that gain can no longer come from any single innovation working in isolation. It requires advances across logic, memory and advanced packaging: transistor architecture (such as gate-all-around transistors), the interconnects moving signals through dense 3D stacks, and packaging that brings compute and memory closer together to address the “memory wall.”
So, when we evaluate a company, we’re not asking ‘does this reduce power somewhere?’ We’re asking whether it changes the system-level equation.
With deeptech cycles running 10 to 15 years and LPs demanding shorter returns, how is Applied Ventures managing expectations without compromising patience?
Deeptech innovation operates on timelines set by science, engineering and industrial adoption, so patience remains important regardless of market cycles. Investing directly as Applied Materials’s corporate venture arm lets us take a long-term view.
In deeptech, most of the value sits behind a single, high-stakes gate: qualification. Before a novel breakthrough is designed into a customer’s product or process, it generates very little revenue. But once it clears that bar and gets designed into a semiconductor node, manufacturing line or product platform, it tends to stay there for the life of that platform and often carries forward into subsequent generations. That’s why we think of deep-tech value as compounding rather than linear — the payoff is a technology becoming embedded in a customer’s roadmap for years, not a single exit event.
Why should a founder take Applied Ventures’s money over a pure-play financial VC, given corporate VCs can be slower to participate?
What we bring instead of speed is depth. Applied Materials has spent decades building expertise across the materials-to-systems stack, advanced manufacturing and the global semiconductor ecosystem, giving founders access to technical expertise, customers, supply chain partners and co-investors. In some cases, we also become a customer ourselves. Through programmes like ASTRA, startups work directly with our business units on real industry challenges, bridging the gap between a promising technology and commercial adoption.
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That’s particularly valuable in deeptech, where success depends on more than technical breakthroughs. Companies also need to navigate qualification, industrialisation and customer adoption. We help founders through that journey with the technical and commercial support needed to scale.
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