More info surrounding Applied Materials....
Giant semiconductor supplier eats up space for apparent warehouse in Austin suburb
https://www.bizjournals.com/austin/n...Pos=0#cxrecs_s
By Justin Sayers – Staff Writer, Austin Business Journal
Mar 13, 2023
A giant semiconductor supplier that continues to eye big manufacturing space in Williamson County has eaten up a large amount of warehouse space in Pflugerville.
Silicon Valley-based Applied Materials Inc. in November inked a deal to occupy the 170,000-square-foot Building 3 at 130 Crossing at 3100 E. Pecan Street, according to officials from Stream Realty Partners, which represented the landlord and developer, Ironwood Realty Partners, in lease negotiations.
It's unclear what Applied Materials plans to do at the site, but documents filed last month with the Texas Department of Licensing and Regulation labeled the project as a "warehouse fit up." The company did not respond to a March 13 request for comment.
The 130 Crossing development is near State Highway 130 and Pecan Street, and could eventually include 1 million square feet of industrial space. It is next to the Amazon.com Inc. distribution center that opened in 2021.
Bob Rice and Parker Rice from Ironwood were the developers on the project. Sam Owen, Will Nichols and Adam Green of Stream represented the landlord on the negotiations.
Applied Materials (Nasdaq: AMAT) creates equipment and software that the world's largest chipmakers use to produce semiconductors. Manufacturing experts have suggested that every chip in the world comes into contact with an Applied Materials product at some point in their creation.
The company, founded in 1967, established a presence in Austin in 1992. Applied's campus at 9700 E. U.S. Hwy. 290 is home to one of the largest manufacturing plants in the region and the company had roughly 3,300 local employees at last count. That site is about nine miles south of the Pflugerville location.
Applied has for more than a year been considering a capital investment of more than $2 billion on 400-plus acres in what's known as Hutto's "megasite," a huge chunk of land ripe for development. In previous public filings, the company estimated the megasite project would create at least 525 jobs and consist of 849,000 square feet of "state-of-the-art development labs and manufacturing facilities, which will be home to Applied’s next-generation [research and development], manufacturing and innovation engine." That site is about 20 miles north of the Pflugerville location.
The company earlier this month gave up its option to buy hundreds of acres, but Bob Farley, the city's economic development director, told Austin Business Journal March 8 that discussions with the company — codenamed "Project Acropolis" in economic development discussions — are ongoing.
The indecision from Applied Materials comes as the semiconductor sector deals with whiplash. Although overall sales soared to record levels in 2022, in part because of pandemic buying, slowing demand in the second half of the year reflected inflation fears, cyclical pressure and geopolitical tensions, according to the Semiconductor Industry Association.
The semiconductor industry has experienced a recent drop in demand, despite large manufacturing pledges made around the country. Applied Materials barely beat analysts estimates for first-quarter revenue with $6.7 billion, and on March 13 added $10 billion to its $4.7 billion share repurchase scheme, while also raising its quarterly dividend, according to Reuters.
The company earlier this year detailed changes to its logistics plans after Miami-based Ryder System Inc. acknowledged that it was laying off 800 people at the Applied site, due to Applied "insourcing a significant portion of the operations and transitioning a portion to two third-party logistics providers."
Applied pledged to hire many of the employees back, and noted in a filing with the U.S. Securities and Exchange Commission that supply chain disruptions and ongoing fallout from the coronavirus pandemic around the globe are having an impact on the price and speed of logistics operations. Executives noted that ongoing constraints may increase the costs of logistics that they would need to pass on to customers.
"Although there have been improvements in supply chain performance, Applied expects some shortages to persist into fiscal 2023 and managing these supply chain constraints to increase shipments to customers remains a top priority," the company wrote in the Dec. 16 filing.
The company pledged to continue investments in research, design and engineering. But no indications were made on where or how big those investments would be.
"We believe that it is critical to continue to make substantial investments in RD&E to assure the availability of innovative technology that meets the current and projected requirements of our customers' most advanced designs. We have maintained and intend to continue our commitment to investing in RD&E in order to continue to offer new products and technologies," the Feb. 16 filing stated.
Shares of Applied Materials opened March 13 around $113.79, giving it a market capitalization of about $95.9 billion, according to Yahoo Finance data.
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