NXP requests tax credits to expand into the US

Dutch chip maker NXP is negotiating tax breaks with local governments in the US state of Texas in exchange for expanding its production capacity in Austin.

According to Financieele Dagblad, the chip maker wants to expand its existing plants in Austin. NXP wants to invest approximately $2.6 billion (about 2.5 billion euros) for this. This should provide the large city of Texas a total of 800 well-paid jobs.

tax advantages

In exchange for this huge investment, the chip maker wants to realize tax benefits in the form of a so-called Chapter 313 agreement. With the benefits under this arrangement, NXP will likely avoid millions of dollars in tax.

Meanwhile, representatives of the chip manufacturer are discussing the arrangement with the Austin Independent School District Board of Directors. This local government will soon vote on whether the chip manufacturer can continue to ask for tax credits. NXP is also seeking support from other local governments, including the city of Austin and the county in which the capital is located, Travis County.

The potential expansion of NXP production in Austin and the surrounding area isn’t entirely certain yet. The Dutch chip maker wants to make a final decision in the last quarter of this year. Once approved, the new production capacity is supposed to be operational in the second half of 2026.

Popular with chip manufacturers

Austin is very popular with chip manufacturers. Manufacturers such as Silicon Laboratories and Cirrus Logic are based there. AMD also has a large presence in the city. In addition to NXP, Samsung is considering setting up a chip factory in the Austin area.

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