Tech company Applied Materials considers Hutto for $2 billion facility

Technology company Applied Materials is considering a site in Hutto for a new $2.4 billion research and development facility that could employ hundreds of people and be another significant addition to central Texas’ booming high-tech sector.

Applied Materials, which is based in Santa Clara, Calif., and has a manufacturing center in northeast Austin, said in a statement to the American Statesman on Friday that Hutto “is one of many attractive locations for potential expansion” that the company is evaluating in the United States, although he did not provide further details.

At a meeting Thursday night, members of the Hutto Independent School District Board of Trustees voted to formally consider a request from the company for tax breaks for the project.

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Speculation has swirled for months that Applied Materials – one of the world’s largest suppliers of manufacturing equipment, software and services for the semiconductor industry – was considering Hutto for a major project. But Thursday’s school board meeting was the first official confirmation of that.

City of Hutto officials used the codename “Project Acropolis” in confidential deliberations over possible tax breaks for a widely regarded company called Applied Materials.

At a meeting of the city’s economic development agency in January, officials said the company behind “Project Acropolis” – which they described as a high-tech manufacturer involved in ” the design and manufacture of components for electronic devices” – could employ 800 people and lead to investments of approximately $2 billion in Hutto.

They also said at the time that the total municipal tax incentives for the project were estimated at $80 million over 10 years.

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The Hutto School Board’s decision to consider Applied Materials’ application under the state’s Chapter 313 incentive program sets in motion a process in which the deal will be reviewed by the Comptroller’s Office. state and negotiated by the school board before returning for a final vote.

“It will be several months before you have the opportunity to make a final decision,” Hutto School District attorney Sara Leon said at Thursday’s school board meeting.

The amount of tax relief Applied Materials is seeking from the Hutto School District is unclear, as a copy of its request had not yet been posted on the comptroller’s website as of Friday.

Under the state’s Chapter 313 program, school districts are reimbursed by the state for tax breaks they agree to give businesses, an attribute that has made the program controversial among critics who say the districts have no reason not to grant them. The Chapter 313 program is set to expire at the end of this year, although Chapter 313 incentive agreements approved before that date are unaffected.

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Applied Materials plans to build a new facility near Hutto, Hutto, a town in Williamson County about 25 miles northeast of central Austin with about 28,000 residents.

“A huge opportunity”

Some Hutto school board members have described the Applied Materials project as a potential boon for Hutto, a Williamson County suburb about 25 miles northeast of central Austin that has a population of about 28,000.

“A great undertaking like this represents a huge opportunity for a town like Hutto,” said school board member Felix Chavez.

According to documents presented to the school board on Thursday, Applied Materials would begin building the facility next year if the project goes ahead and complete it in 2026, creating 7,190 construction jobs.

Founded in 1967, Applied Materials has about 27,000 employees, according to its website, and it had revenue of $23 billion in fiscal 2021.

The manufacturing facility it operates off US 290 in northeast Austin employs approximately 2,500 workers. The company recently expanded this facility to include a logistics services center, adding a 729,000 square foot building with warehouse and office space.

Applied Materials also has a facility in northwest Austin that houses various operations, including an information technology unit and a data center.

If the company goes ahead with the big Hutto project, it would add to a recent string of major economic development wins for the Austin metro area.

In November, Samsung announced it would build a $17 billion chip factory near Taylor, which is also in Williamson County. The next-generation chip factory is expected to employ 1,800 people. Electric carmaker Tesla announced late last year that it had moved its headquarters to Austin and in December began production at its new $1.1 billion factory in Travis County.

In this 2007 photo, Applied Materials employees work at the company's Northeast Austin plant.  Applied Materials is one of the world's largest suppliers of manufacturing equipment, software and services for the semiconductor industry.

For Applied Materials, the potential Hutto project should increase its visibility in what has been a booming semiconductor sector in the Austin area, where industry giants such as Samsung, NXP and Infineon have operations. majors.

According to the Austin Regional Manufacturers Association, about a quarter of all manufacturing in the region is attributable to semiconductor companies, while Texas overall is one of the largest producers of semiconductors in the states. -United.

“Applied Materials is proud to have pioneered the technology in Texas,” Applied Materials said in its statement Friday. “Austin has played a vital role in the global growth of Applied Materials, and the products we manufacture in Texas are shipped around the world.”

The company’s potential expansion in the region also comes amid a global shortage of semiconductors, which are used in everything from automobiles to laptops.

In February, Applied Materials CEO Gary Dickerson said the industry still has a long way to go before supply catches up with demand. He said his company is planning strategic investments globally to increase its manufacturing capacity.

“This is an unprecedented time for Applied Materials and the semiconductor industry,” Dickerson said at the time. “The demand for semiconductors has never been stronger or broader, and the ability of the supply chain to meet this growing demand is limited in the near term.”

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