Almost exactly a year after it was rejected for school district incentives, a Round Rock-based manufacturer of photomasks for the semiconductor industry is pursuing a $185 million expansion in the Austin suburb that would solidify its standing as a major employer in Williamson County.

Toppan Photomasks Inc. — which counts as clients Samsung Electronics Co. Ltd., Texas Instruments Inc. and Advanced Micro Devices Inc. — will be considered for a $1.25 million incentives package during separate April 27 meetings of the Round Rock City Council and the city's Transportation and Economic Development Corp., public documents show.

The company's plans include a three-phased overhaul of its existing facility at 400 Texas Ave., with roughly $28 million in real property improvements and $157 million in business property investments by Dec. 31, 2029, according to the documents. It could add 50 employees to its current headcount of 231.

Last year, Round Rock Independent School District trustees voted 3-3 for an application for Chapter 313 incentives from Toppan Photomasks. The deadlock meant the motion failed. At the time, the company indicated it could invest up to $900 million and create more than 250 jobs, meaning the current plans are significantly smaller.

The Chapter 313 incentives program has since been eliminated in the state, although there is a push to institution a replacement.

Round Rock officials said during an April 25 Council briefing that, over the past year, Toppan Photomasks was courted heavily to move to other sites across the country, but has decided to move forward with what was described as a "modernization" of its 100,000-square-foot facility in the city.

"With the expansion and initiatives throughout the country to bring semiconductor manufacturing back to the U.S. and the U.S. CHIPS and Science Act, there's been more funding that is spurring a lot of growth in this industry," said Jordan Robinson, president and CEO of the Round Rock Chamber. "Toppan had an opportunity to kind of evaluate sites across the country ... and they have decided they would like to move forward with their Round Rock expansion."

Round Rock Mayor Craig Morgan called it a "big get for us."

"They were getting courted heavily outside of Texas to move from here," he said during the meeting. "I'm in hopes with this agreement and hopefully with the new, what we're not calling 313s, they're able to go back to the school district and work to help keep them here with a better program that will come out of the legislature hopefully that will keep these types of businesses here."

Williamson County Judge Bill Gravell told the Austin Business Journal that while the county company is not currently in line to receive incentives from the county, county officials would consider such a request if it were made.

"Photomask has been a wonderful partner with us in Williamson County," Gravell said. "The thought of Photomask expanding and continuing to work here in Williamson County is exciting news."

Representatives for Toppan declined to comment.

Part of global semiconductor supply chain

Toppan Photomasks is a subsidiary of Toppan Inc.., a Japanese company that spans multitude of industries and had more than $13 billion in revenue in 2019. The semiconductor wing has been headquartered in Round Rock since 1986, with additional locations in Japan, Germany, France, China, South Korea and Taiwan. Toppan earned the 2020 Supplier Excellence Award from TI, which is working on a massive, $30 billion project in Sherman, north of Dallas, and has more than 12,000 suppliers worldwide.

Photomasks are opaque plates with holes or transparencies that allow light to shine through in a defined pattern for semiconductors. Robinson said and Toppan indicates on its website that the company has worked in the past with Samsung, AMD, Motorola Inc. and Micron Technologies Inc., the latter of which considered putting its next factory in Lockhart, south of Austin, before opting instead for New York.

Toppan is the 25th-largest private-sector employer in Williamson County, according to the Williamson County Economic Development Partnership.

The Toppan expansion would be another example of the "Samsung effect," with suppliers for the South Korean company growing in and around Austin as it builds a $17 billion semiconductor fabrication plant in Taylor. Samsung has indicated it could eventually invest about $184 billion at the site.

Other companies in the Samsung supply chain that are already expanding in Central Texas include KoMiCo Technology Inc., which handles cleaning and repair of semiconductor equipment parts; industrial gas supplier Linde Inc. in Taylor; and AMD, which plans to expand its Austin campus, according to Opportunity Austin, the Greater Austin Chamber of Commerce's economic development wing.

Incentives details

Toppan's proposed plans in Round Rock call for "significant" additions, expansions, improvements and increases to employee count, according to public documents. The first phase is expected to result in a $53.8 million investment and 24 additional employees by Dec. 31, 2025. The second phase is planned to be $100.1 million in investments with six employees added by Dec. 31, 2028. The remainder of the investment would come by by Dec. 31, 2029, and the company could end up with 281 employees.

In return, the Round Rock Transportation and Economic Development Corp. would provide $1.25 million in incentives spread across three payments: $600,000 after the completion of phase one, $150,000 after phase two and $500,000 after phase three, according to the documents.

Robinson said the company is not necessarily adding on to the site, as of now, but is mostly modernizing and upgrading the facility. She said that the timeline on the project was done in a way that would allow Toppan flexibility to overcome any lingering supply chain issues.

She estimated the city would recoup the value of the investment in approximately 5.8 years via various taxes and other revenue.

Robinson was asked during the meeting if she was concerned about the pledged job creation. The chamber CEO labeled the estimated 50 new jobs as "conservative" and said they will be posted soon to give the company a long runway to hit those benchmarks.

She added that the school district and other stakeholders are being involved to prepare people to fill those jobs, which could result in annual pay of $70,000 straight out of high school.

"We kind of joke there's not a degree to make photomasks, so a lot of it is on-the-ground training," she said.

For Toppan, the potential expansion comes as the company aims to capitalize on the growing semiconductor market. The company announced last year it was carving out the photomasks business as a joint venture with Integral Corp., a Japanese private equity firm.

"We are very excited to be making a new start that will drive greater efficiency and provide even better service in an extremely dynamic market," Toppan Photomask CEO Teruo Ninomiya said in a statement at the time. "An IPO will be one milestone for us in the future as we look to support the long-term growth of the semiconductor sector in collaboration with our customers in a constantly changing landscape. We will bring together the expertise and excellence of our people throughout the world to drive continuous improvement and create new value as our customers' first-choice partner by leveraging strengths in technological development and teamwork as well as the outstanding quality, cost, and delivery enabled by our global manufacturing network."