Dutch chip manufacturer NXP is negotiating tax breaks with Texan authorities in exchange for expanding its production capacity in Austin.

According to Dutch media, the chip manufacturer wants to further expand its existing factories in Austin, the capital of Texas, US. NXP wants to invest roughly 2.6 billion dollars (about 2.5 billion euros). This should create a total of 800 well-paid jobs in Austin.

Tax breaks

In exchange for the investment, the chip manufacturer wants to realize tax benefits in the form of a so-called Chapter 313 agreement. The arrangement may allow NXP to avoid paying millions of dollars in taxes.

Meanwhile, NXP’s representatives are discussing the arrangement with the board of the Austin Independent School District. This local government will soon vote on whether the chip manufacturer can apply for the tax breaks. NXP is also seeking support from the city of Austin and the county in which the capital is located, Travis County.

NXP’s expansion in Austin and the surrounding area is far from certain. The Dutch chip manufacturer wants to make a final decision in the last quarter of this year. If the plans are approved, the new production capacity would become operational in the second half of 2026.

Popular with chip manufacturers

Austin is popular with chip manufacturers. Silicon Laboratories and Cirrus Logic have their headquarters in the city. AMD has a significant local presence as well. Besides NXP, Samsung is considering establishing a production facility in the area.

Tip: NXP turnover increases substantially