Austin City Council approves development agreement with semiconductor company

AUSTIN (KXAN) -- Thursday, Austin City Council members approved an economic development agreement to support a $290.8 million expansion of NXP, a semiconductor company with two facilities in Austin.

The company filed for a Chapter 380 business expansion agreement, which offers tax incentives to NXP. In exchange, the City of Austin will get a projected $1.53 million and has the ability to tie additional benefits to the deal.

The most widely discussed of those benefits by Austin City Council members were labor requirements and childcare.

NXP will be required to match the City of Austin's living wage, which is no less than $20.80 starting Oct. 1, 2023. If the City of Austin were to later increase its living wage, the company would be required to do the same.

Additionally, council members required the company to create both a childcare fund for its employees and put money towards a citywide childcare fund.

"We're supportive of the idea that this is also going to support childcare around the facilities where we operate," said Mark Kroeker, NXP's head of U.S. regulatory and government affairs. "We don't want to be put in a position of picking winners and losers of the districts but we strongly support any equitable distribution of childcare funds."

It's part of NXP's effort to expand and modernize both of its existing Austin facilities, one at 6501 W. William Cannon Drive and the other at 3949 and 3501 Ed Bluestein Blvd. The plan will allow the company to add 53 new full-time jobs.

Right now, those two facilities house 2,768 employees, many of whom spoke at Austin's Thursday City Council meeting.

"NXP's investment in its Austin facilities will update and extend the life of the fabs [fabrication plants] where over 1,000 of our manufacturing focused employees work and will create longevity and new opportunities for a whole new generation of Austinites," Kroeker said.

NXP staff have told council the city partnership will make NXP's application stronger for federal funding under the CHIPS for America Act, which would bring billions of dollars to Central Texas.

You can read the full agreement here.