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 mark another big addition to the booming Central Texas 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 several attractive locations for potential expansion” that the company is evaluating in the United States, although it didn’t provide additional details.
During a meeting Thursday night, board members of the Hutto Independent School District voted to formally consider an application from the company for tax breaks for the project.
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Speculation has circulated for months that Applied Materials — one of the world’s largest suppliers of manufacturing equipment, software and services to the semiconductor industry — was considering Hutto for a significant project. But Thursday’s school board meeting was the first official confirmation of that.
Hutto city officials have been using the code name “Project Acropolis” in confidential deliberations over possible city tax breaks for a company that’s widely believed to be Applied Materials.
During 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 fabrication of components for electronic devices” — could employ 800 people and result in about $2 billion in investment in Hutto.
They also said at the time that total city tax incentives for the project are estimated at $80 million over 10 years.
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The Hutto school board’s decision to consider Applied Materials’ application through the state’s Chapter 313 incentive program sets in motion a process in which the deal will be analyzed by the state comptroller’s office and further negotiated by the school board before coming back for a final vote.
“It will be several months before you have the opportunity to make a final decision,” Sara Leon, an attorney for the Hutto school district, said during Thursday’s school board meeting.
The amount of tax breaks that Applied Materials is seeking from the Hutto school district is unclear, because a copy of its application had not yet been posted to the comptroller’s website Friday.
Under the state’s Chapter 313 program, school districts are reimbursed by the state for the corporate tax breaks they agree to provide, an attribute that has made the program controversial among critics who say 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 deals approved before then won’t be affected.
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‘A huge opportunity’
Some members of Hutto’s school board described the Applied Materials project as a potential boon to Hutto, a Williamson County suburb about 25 miles northeast of central Austin that has about 28,000 residents.
“A big company like this represents a huge opportunity for a town like Hutto,” school board member Felix Chavez said.
According to documents presented to the school board Thursday, Applied Materials would start building the facility next year if the project goes forward and would finish 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 $23 billion in revenue in fiscal 2021.
The manufacturing facility it operates off U.S. 290 in Northeast Austin employs about 2,500 workers. The company recently expanded that facility to include a logistics services center, adding a 729,000-square-foot building with a 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 forward 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 chipmaking facility near Taylor, which is also in Williamson County. The next-generation chip fabrication plant is expected to employ 1,800 people. Electric automaker Tesla late last year announced that it had moved its corporate headquarters to Austin, and in December started production at its new $1.1 billion Travis County factory.
For Applied Materials, the potential Hutto project stands to increase its profile in what has been a booming semiconductor sector in the Austin area, where industry giants such as Samsung, NXP and Infineon have major operations.
About a quarter of all manufacturing output in the region is attributable to semiconductor companies, according to the Austin Regional Manufacturers Association, while Texas overall is one of the biggest semiconductor producers in the United States.
“Applied Materials is proud to have been a tech pioneer in Texas,” Applied Materials said in its statement Friday. “Austin has played a critical role in Applied Materials’ global growth, and the products we make in Texas are shipped all over 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 laptop computers.
In February, Applied Materials CEO Gary Dickerson said the industry has a long way to go before supply catches up with demand. He said his company was planning strategic investments globally to increase its manufacturing capacity.
“This is an unprecedented period for Applied Materials and the semiconductor industry,” Dickerson said at the time. “Demand for semiconductors has never been stronger or broader, and the supply chain’s ability to fulfill this growing demand is constrained in the near-term.”
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