Silicon Valley’s Applied Materials eyes Austin metro for $2B project

A small suburb northeast of the Austin metropolitan area may land a multibillion-dollar capital investment from a global semiconductor supplier.

Santa Clara, California-based Applied Materials is seeking incentives from the Hutto Independent School District to help it build a $2 billion-plus research and development facility in the Williamson County city of Hutto. The ISD board of trustees voted last night to accept the semiconductor supplier’s incentive application, the first step for the company to secure property tax abatements.

Last night’s meeting also provided the first public confirmation that Applied Materials is interested in developing in the area. Austin has been a magnet in recent years for large capital investments, the most notable of them Samsung Electronics’ $17 billion chipmaking plant planned for Taylor, the suburb directly east of Hutto. Industry experts have said Central Texas is on the way to becoming one of the world’s most important semiconductor hubs, a title that would carry extra weight amid a global chip shortage.

Officials with Applied Materials didn’t return requests for comment. People familiar with the semiconductor supplier’s plans told The Real Deal that other locales are also under consideration for the project.

“Tonight, we’re just starting a journey,” Sara Leon, an attorney for the school district, said at last night’s meeting. “It’ll be several months before you have an opportunity to … make a final decision.”

It wasn’t clear where the company would build its research and development facility, though some people have suggested that the Hutto “megasite” could be a contender. The site is a roughly 1,400-acre greenfield along U.S. Route 79 that’s been marketed for development for several years. That could also put Applied Materials just east of Samsung’s future fabrication plant.

Applied Materials creates equipment and software that the world’s largest chipmakers, such as Samsung and Intel, use to create semiconductors. The supplier established its presence in the Austin area in 1992 and has a manufacturing facility at 9700 E. U.S. Highway 290 in northeast Austin, where local news outlets say the company employs almost 2,800 people.

The company is asking for Chapter 313 tax abatements, which let a school district cap the taxable value of property between $10 million and $100 million for up to 10 years. That applies to the portion of property taxes that the school district would get for maintenance and operations. The program, set to expire at the end of the year, is used for big manufacturing and energy projects such as Samsung’s $17 billion chipmaking factory or Tesla’s $1.1 billion factory east of Travis County.

The company may also be tied to incentive applications with the city of Hutto and Williamson County.

Applied Materials’ research and development facility could create hundreds of direct jobs and thousands of construction jobs. Hutto had a population of 27,577 in 2020, according to U.S. Census data.

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