Tech firm Applied Materials considers Hutto for $2.4 billion facility, hundreds of jobs

A global supplier to the semiconductor sector is formally eyeing expansion into an Austin suburb — and the capital investment could top $2 billion capital while bringing more than 800 jobs to Hutto.

The Hutto Independent School District board of trustees on March 31 unanimously voted to accept an application for a Chapter 313 state-funded property tax incentives agreement with Applied Materials Inc. that would aid the construction of a research and development facility in the fast-growing but still small suburb northeast of Austin. Chapter 313 incentives can be used for new manufacturing and energy projects, although the program is currently slated to expire at the end of the year.

Hutto is just west of Taylor, another small suburb that has lured a huge Samsung Electronics Co. Ltd. semiconductor factory.

The application in Hutto marks the first public disclosure of the involvement of Silicon Valley-based Applied Materials (Nasdaq: AMAT), already a major employer in Austin, with a still-growing facility off U.S. Highway 290. Austin Business Journal reported in February that the company was eyeing the city for the project. The school board vote starts the process for the incentives application and still requires a formal review from the state comptroller, before returning to the board for another vote.

“While this is a great opportunity, just a reminder that tonight what we are doing is approving the application process to go through,” board president Billie Logiudice said during the March 31 meeting. “We’ll be coming back as this progresses along — or doesn’t — and see where we’re at.”

The Santa Clara, California-based company creates equipment and software that the world’s largest chipmakers use to produce semiconductors, and manufacturing experts have suggested that every chip in the world comes into contact with an Applied Materials product at some point in manufacturing.

In a statement, the company said Hutto “is one of several attractive locations for potential expansion being considered.”

“Applied Materials is proud to have been a tech pioneer in Texas. We came to Austin in 1992 and have created more than 7,000 jobs. 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 statement said.

Sara Leon, an attorney for HISD, said during the meeting that the company’s investment would be exceed $2 billion and would be for a state-of-the-art research and development laboratory.

She added that the application requires a minimum number of jobs, which was listed at 25 jobs with an average salary of $69,000, but the project would create much more than that — including 7,000 construction jobs.

Chapter 313 allows a school district to cap the taxable value of a property between $10 million and $100 million for up to 10 years, for the portion of the property taxes it would receive for maintenance and operations. The tool has been used by several companies making massive investments in Central Texas, including the $17 billion Samsung chipmaking plant in Taylor and Tesla Inc.’s $1.1 billion facility rising in Travis County. However, the Chapter 313 program is slated to end Dec. 31, 2022, because it was not reauthorized by the last state legislature, and companies are rushing to get applications approved before the deadline.

Leon said Applied Materials would invest an initial $80 million within a certain time period, after which the project’s valuation for HISD maintenance and operation taxes would be capped at $80 million for a further period of time. But full terms would be negotiated at a later date.

She added that benefits to the school district include tax savings coming from state, no loss of revenue and the fact that it would increase the district’s tax base.https://d0a95794f88b78468467f2b2e03c0ee2.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html

“Tonight we’re just starting a journey,” Leon said. “It’ll be several months before you have an opportunity to have to make a final decision.”

No site disclosed — but there’s a likely candidate

Back in February, Hutto leaders divulged details of an economic development prospect called “Project Acropolis.” The project was said to represent a manufacturer in the semiconductor industry looking to build on 450 acres at the Hutto “megasite,” a roughly 1,400-acre greenfield site along U.S. Route 79 that is primed for development.

Hutto officials did not name the company during the February meeting, and have declined to provide additional details, cautioning that talks regarding incentives are ongoing and terms of any deal might change. But sources have told the the Austin Business Journal the company is Applied Materials.

Courtesy of Austin Business Journal. See the full article here.