According to Reuters, American chip manufacturer Onsemi recently announced plans to invest up to $2 billion (approximately RMB 14.5 billion) to increase its semiconductor production in the Czech Republic, thereby expanding the company's capacity in Europe. This brownfield project not only responds to the European Union's pursuit of self-sufficiency in critical supplies but also marks the largest single foreign direct investment in the history of the Czech Republic.
Onsemi will expand its operations in the eastern town of Roznov pod Radhostem to cover the entire production chain of silicon carbide semiconductors, including chip modules for the automotive and renewable energy sectors. Onsemi stated in a press release, "The plant will produce the company's intelligent power semiconductors, which are crucial for improving the energy efficiency of electric vehicles, renewable energy, and AI data center applications." Compared to standard silicon chips, silicon carbide chips, though more expensive, are more energy-efficient, lighter, and more durable, making them increasingly favored by automakers who seek to improve vehicle performance and efficiency.
Simon Keeton, head of Onsemi's Power Solutions Division, revealed that the newly invested factory could begin production in 2027, but did not disclose further details on employment, production capacity, or expected revenue. Despite Onsemi's recent announcement of plans to lay off about 1,000 of its more than 30,000 employees, this investment remains within Onsemi's capital expenditure targets. Onsemi said, "Through this investment, Onsemi will help the Czech Republic occupy a more important strategic position in the EU semiconductor value chain and demonstrate that all EU countries can benefit from the European Chips Act."
Czech Prime Minister Petr Fiala stated that this investment would be "the largest of its kind in modern history" and would double the current production capacity of the Czech chip factory, which currently produces 10 million chips daily. The Czech Ministry of Industry and Trade indicated that the country might provide assistance up to 27.5% of the total investment for this brownfield project, adding that these incentives should be approved in the first quarter of 2025 and that notification to the European Commission is required before approval.
Onsemi did not comment on the scale of the incentive plan being negotiated with the Czech government.
Before Onsemi's expansion of chip capacity in Europe, STMicroelectronics had planned to invest 5 billion euros ($5.4 billion) to establish a chip manufacturing and packaging plant in Catania, Italy, with approximately 2 billion euros in direct government funding. TSMC plans to invest $11 billion in a factory in Dresden, with German officials indicating last year that Germany would provide up to 5 billion euros in funding. Meanwhile, Intel plans to invest 30 billion euros to establish two chip factories in Germany, receiving significant government subsidies.
Consulting firm McKinsey predicts that the global semiconductor manufacturing industry will grow from $600 billion in 2021 to $1 trillion by 2030.
