Onsemi to invest up to $2B in Czech semiconductor plant

U.S. chipmaker Onsemi will invest up to $2 billion to boost its semiconductor output in the Czech Republic, it said on Wednesday, expanding the company’s European capacity as the European Union seeks self-sufficiency in critical supplies.

The brownfield project would be the largest one-off direct foreign investment in the Czech Republic.

Pending approval of state aid, Onsemi will expand its operations in the eastern town of Roznov pod Radhostem to house the full production chain for silicon carbide semiconductors including final chip modules used in the automotive and renewables sectors.

The investment follows similar moves by STMicroelectronics – also for silicon carbide chips – in Italy, and by Intel and TSMC in Germany.

“The site would produce the company’s intelligent power semiconductors essential for improving energy efficiency of applications in electric vehicles, renewable energy and AI data centres,” an Onsemi statement said.

Silicon carbide chips are more expensive than standard silicon ones but are favoured by automakers because they are energy-efficient, lightweight and tough.

Massive supply chain disruptions during the COVID-19 pandemic and a rise in trade tensions with China have heightened scrutiny of Europe’s reliance on Asia for chip supplies, with recent disruption to Red Sea shipping adding to concerns.

Czech Prime Minister Petr Fiala said the investment would be “the biggest of its kind in modern history” and would multiply current output at the plant, which is 10 million chips per day.

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

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

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