Onsemi to Invest Up to $2B in Czech for Chip Production

On June 19, Onsemi, a leading American chip manufacturer, unveiled plans to invest up to $2 billion to boost its semiconductor production in the Czech Republic. This significant investment is set to expand Onsemi’s production capacity in Europe, aligning with the European Union's goal of achieving self-sufficiency in critical technology sectors.

This initiative will represent the largest single foreign direct investment in Czech history. Onsemi will expand its operations in the eastern town of Roznov pod Radhostem, establishing a comprehensive production chain for silicon carbide (SiC) semiconductors. These advanced semiconductors are essential for applications in the automotive and renewable energy industries.

Onsemi's investment follows similar commitments by industry leaders such as STMicroelectronics in Italy, and Intel and TSMC in Germany, reflecting a broader trend towards enhancing semiconductor production capabilities within Europe.

In a statement, Onsemi emphasized that the new facility will produce smart power semiconductors, which are critical for improving the efficiency of electric vehicles, renewable energy systems, and AI data centers. SiC chips, although more costly than traditional silicon-based chips, offer superior efficiency, lightweight, and durability, making them highly valued by automakers.

Industry analysts note that the COVID-19 pandemic's supply chain disruptions and escalating trade tensions with China have driven Europe to reduce its dependency on Asian chip supplies. The recent Suez Canal blockage has further highlighted the vulnerabilities in the global supply chain.

Czech Prime Minister Petr Fiala commented that Onsemi's investment would double the plant's current capacity, which stands at 10 million chips per day.

The head of Onsemi’s Power Solutions Group indicated that the new production line is expected to begin operations by 2027, although details on employment opportunities, production volumes, and projected revenues remain undisclosed.

The Czech Ministry of Industry and Trade has announced plans to provide financial incentives for this project, with state aid potentially covering up to 27.5% of the total investment. This incentive package is anticipated to receive approval in the first quarter of 2025.