Arm, the British chip designer whose processor architectures power billions of devices, is beefing up its presence in southwest Austin with fresh lab space at Encino Trace. The expansion will bring semiconductor failure-analysis capabilities to the two-building campus and is expected to generate construction work, engineering jobs, and new tenant improvements along the Southwest Parkway corridor. In the process, it tightens the connection between Austin’s office market and the city’s fast-growing chip-design and AI ecosystem.
State grant backs the buildout
The project is supported by a Texas Semiconductor Innovation Fund award of $4,162,550, Governor Greg Abbott's office announced in February, and Arm said the work will represent roughly $71 million in capital investment and create more than 320 jobs, according to the Office of the Texas Governor. Local commercial real-estate coverage has pinned the work to Encino Trace in southwest Austin, as reported by the Austin Business Journal.
Encino Trace and the site
Encino Trace is a Class-A office campus at 5707 Southwest Parkway in southwest Austin, where the owner says Arm already anchors the property and occupies roughly 52% of the net rentable area under a lease that runs through 2033. As outlined by OakPoint Real Estate, partial certificates of occupancy are already in hand for Building 2 lab space, and phased tenant deliveries are expected in the second half of 2026.
Arm's pitch
“We’re expanding our labs, strengthening our capabilities, and creating hundreds of new roles,” Arm CEO Rene Haas said in a statement to the governor’s office. The company and state officials describe the new lab as a way to speed up development of compute and AI technologies in the United States, per the governor’s release.
Local ripple effects
Arm’s Austin operation already employs roughly 800 people, making it the company’s largest U.S. site, as reported by the Houston Chronicle. Developers say that adding lab and failure-analysis capabilities, combined with OakPoint’s plan to demis suites for 10,000–20,000-square-foot users, could nudge leasing demand along Southwest Parkway toward more technically sophisticated tenants, as outlined by OakPoint Real Estate.
Phased deliveries are expected later this year, and the expansion has already shown up in industry coverage ahead of the Commercial Real Estate Awards on Wednesday, May 20, 2026. The project underscores Austin’s growing role in chip design and lab services, a trend state incentives and the Texas CHIPS Act were designed to accelerate, as reported by the Austin Business Journal.
