No doubt, this is the heart of the issue. Not all materialists would agree with this. I do not, for example.
If by, "matter," is meant only that which we can be directly conscious of, or perceive, existence is reduced to that which is studied by the physical sciences, physics, chemistry, biology, and their branches. This is the view that is generally meant by, "materialist," and the one I'm sure you had in mind.
I call such materialists, "physicalists," which they would not object to, and allows me to include under the concept, "material," all that we can know, either by direct perception (physcal existence) or by actually doing it (being alive, conscious, and volitional).
I think there is a great mistake in philosophy that excludes from the realm of, "real existence," that which is known to exist, but cannot be directly perceived. Namely, life (as a self-sustained process not defineable in physical terms), consciousness, and volition (without which both reason and knowledge are impossible).
The mistake is an ontological one. The following are from some notes (mine) on a correct ontological view:
To most philosphers the question of conscious and volition in a strictly material universe is a great difficulty. The problem is usually stated as a question, how does rational/volitional consciousness arise in a determined universe?
The question is asked "form the wrong end," so to speak. It implies a paradox, which automatically disqualifies it. But, if the question is invalid, is what seems to be an enigma to be just ignored?
Certainly not. But the reason for the question needs to be reconsidered. Rational/volitional creatures in a material world in which all physical events are determined cannot be doubted, because here we are. If we consider the question from that end, the problem dissappears. Existence obviouosly includes rational/volitional beings. It is we, those rational/volitional beings, who ask the questions. Non-living entities do not ask questions. Living, but non-rational beings do not ask questions either.
So, natural existence includes, material, living, and rational/volitional beings. Some existents are material, and living, but not rational/volitional. Some existents are material, but neither living or rational/volitional.
If we regard the highest level of natural existence in its most complete form, it is material, living, and rational/volitional (that is, human beings). This is material existence in its highest form, its fullest ralization. (By material existence, we mean, that which exists independently of anyone's knowledge or consciousness of it, but which can be known or we can be conscious of.)
A larger portion of existence, a less complete or inferior form, is material and living, but is not rational/volitional (all other organisms). The largest but least complete portion of existence is material only, but neither living or rational/volitional (all non-living entities).
From this view, volitional conscious beings are what material existence is when it is realized in its fullest potential, and the living but non-volitional aspects of existence (all organisms except man), are merely material existence in its fullest realization with volition "left out," and non-living aspects of existence, (physical existence) is merely material existence with volition and life "left out." There is no question, then, "how does determined material existence become conscious and rational/volitional?" The apparent question is the result of starting in the wrong place. If there were a question it would be, "how can there be just dumb dead determined matter?" But that question is already answered. The purely physical part of material existence is determined entirely by physical laws, because that is all that is left when the other "natural" things that determine the behavior of entities, life and volition, are absent.
You have not seen this view before, so I do not expect you to make any judgements based on it. I have only presented it to demonstrate that a determined material physical existence is not a philosophical problem to the existence of life and volition, by which reason and knowledge are made both necessary and possible.
Hank