Onsemi reveals $2 bn semiconductor investment in Czech Republic

U.S. chipmaker Onsemi has decided to invest up to $2 billion to boost its semiconductor production in the Czech Republic.

Onsemi job

Onsemi is expecting incentives from the Czech Republic for expanding its silicon carbide (SiC) manufacturing facility in Europe.

Onsemi in a statement said that the site would produce the company’s intelligent power semiconductors that are essential for improving the energy efficiency of applications in electric vehicles, renewable energy and AI data centers.

Onsemi did not reveal the number of jobs it can create. Recently, Onsemi announced a significant job reduction to enhance profit.

Onsemi said it will expand its operations in the eastern town of Roznov pod Radhostem to house the production chain for silicon carbide semiconductors including final chip modules used in the automotive and renewables sectors.

Onsemi’s existing facility in Czech Republic can produce more than three million wafers annually, including more than one billion power devices.

The investment is within the company’s capital expenditure (Capex) target and follows its announcement last week of about 1,000 job cuts among its 30,000-strong workforce.

COMMENTS

“Our brownfield investment would establish a Central European supply chain to better service our customers’ rapidly increasing demand for innovative technologies that improve the energy efficiency in their applications,” said Hassane El-Khoury, president and CEO of Onsemi.

“Onsemi’s decision to expand in Czechia is a clear confirmation of our country’s attractiveness for foreign investment and will bring significant momentum for the development of our economy,” said Jozef Sikela, Minister of Industry and Trade of the Czech Republic.

WHAT RIVALS DO

Earlier, STMicroelectronics announced its investment plans in Italy for silicon carbide chips. Intel and TSMC are making investment in Germany.

The head of Onsemi’s power solutions division, Simon Keeton, told Reuters news that production from the new investment could start in 2027 but did not disclose further detail on jobs, production volumes or expected revenue.

Global semiconductor manufacturing is expected to become a trillion-dollar industry by 2030, expanding from $600 billion in 2021, consultancy firm McKinsey says.

Onsemi did not comment on the size of the incentive package under negotiation with the Czech government.

“With this investment, the company would contribute to the strategic positioning of the region within the EU’s semiconductor value chain and demonstrate that all EU countries can benefit from the European Chips Act,” Onsemi said.

The STMicroelectronics plant in Catania will cost 5 billion euros ($5.4 billion) and receive a direct government grant of about 2 billion euros.

Germany will contribute up to 5 billion euros to TSMC’s $11 billion factory in Dresden, German officials said last year.

Intel, meanwhile, plans to spend 30 billion euros on two chip plants in Germany, with substantial government subsidies.

Baburajan Kizhakedath

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