Austin's first major economic incentive deal in years was advanced by City Council Sept. 21, allowing Dutch semiconductor company NXP to move its local modernization project forward as it seeks additional federal funding to support the initiative.

The big picture

Council members unanimously voted to move a proposed Chapter 380 economic development agreement with NXP ahead after a few weeks of review. Chapter 380 deals allow local governments to trade incentives like tax breaks to private businesses in exchange for benefits like economic support or the creation of new jobs.

NXP's Project Live Oak would see the chipmaker invest a combined $290.8 million in its Oak Hill and East Austin manufacturing sites for facility upgrades. NXP says the project will add 53 jobs across both sites, which today are home to more than 2,700 employees.

Mark Kroeker, NXP’s head of U.S. regulatory and government affairs, thanked city leaders after the vote and said the company was "delighted" with the decision to support the project.

"We are excited to move forward with our [Austin Technology & Manufacturing Center] and Oak Hill sites expansion, both important locations in the community and those that will yield the creation of skilled careers in Austin," he said in a statement.

Accounting for tax reimbursements to NXP and other city charges, Austin officials expect the city stands to gain about $1.53 million from the five-year deal that would conclude at the end of 2029.

After discussing the issue with city officials, NXP also committed to reinvest a portion of its package to help both its employees and Austinites in nearby communities access child care services.

"Thank you to NXP, thank you to our professional staff, thank you for this council for making child care a priority and approaching it as a priority," Mayor Kirk Watson said after the vote in favor of the plan.

The big picture

NXP is one of the largest and oldest employers in the semiconductor sector across Central Texas, which has seen continued growth and attention in recent years. The region is also welcoming notable expansions from tech companies including Samsung and other related businesses in the tech and manufacturing industries.

After reaching a partnership with Austin, NXP representatives said the company will work to secure federal funding for its expansion. NXP could be one of many companies and institutions to draw support from the U.S. government under recent legislation passed to advance America's position in the global semiconductor industry.

"NXP’s pursuit of this investment incentive is part of an overall strategy to leverage the bipartisan CHIPS for America Act, passed by the U.S. House and Senate and signed by the president, which provides critical funding for semiconductor manufacturers of all kinds to expand capacity in the United States," Kroeker said. "This is an important step forward for both Austin and domestic manufacturing and we look forward to our continued partnership with the city."

Quote of note

"I had seen them all around town before I ever worked in public office, and so I just know they've been a good community partner for a long time, and I look forward to continued partnerships," said Mayor Pro Tem Paige Ellis, who represents City Council District 8 including NXP's Oak Hill plant. "I'm glad that this particular proposal is not just about District 8, it's about District 1 too and really hiring our local talent and making sure that we're giving people good opportunities to build a life here."