NXP Semiconductors N.V. (NASDAQ:NXPI) shares are trading higher on Wednesday after it secured a 1 billion euros (around $1 billion) loan from the European Investment Bank (EIB) to bolster its RDI investments across its semiconductor portfolio.

The six-year loan, with an approximate interest rate of 4.75% for dollar-denominated tranches, will fund research and development activities at NXP’s facilities in Austria, France, Germany, the Netherlands, and Romania through 2026.

The financing supports the EIB’s newly launched “Strategic Tech-EU” program aimed at accelerating innovation in key sectors like AI, microchips, life sciences, and quantum computing.

The investment will help establish a state-of-the-art European chip ecosystem aligned with the EU Chips Act, the Dutch Semicon Valley initiative, and the Netherlands’ National Technology Strategy.

In addition to advancing R&D in power electronics, microprocessors, and microcontrollers, NXP will prioritize improving the energy efficiency of its devices.

Maarten Dirkzwager, Executive Vice President and Chief Strategy Officer at NXP, said, “This loan complements the various existing instruments supporting our industry, such as the Important Projects of Common European Interest (IPCEI) and other initiatives currently being set up by the European Commission and the Member States.”

“It is also consistent with our investment in the ESMC joint venture fab currently being built in Germany, which will address Europe’s automotive and industrial chip requirements.”

Investors can gain exposure to the stock via iShares MSCI Water Management Multisector ETF (NASDAQ:IWTR) and Fidelity Electric Vehicles and Future Transportation ETF (BATS:FDRV).

Price Action: NXPI shares are up 1.75% at $214.33 at the last check Wednesday.

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