Czechia eyes chip supremacy with building of major semiconductor plant

Onsemi, a U.S.-based semiconductor manufacturer, will invest up to CZK 46 billion to establish a silicon carbide semiconductor factory in Rožnov pod Radhoštěm, Czech Republic. This expansion marks a significant development for the Czech economy, with government incentives currently under discussion.

Onsemi Vice President Aleš Cáb highlighted the company’s collaboration with local schools to train engineers, emphasizing that Moravian talent will play a vital role in the production process, which encompasses everything from technology development to customer support.

"The entire process from technology development to chip design and production to customer support will take place in Rožnov," Cáb told Seznam Zprávy.

While specifics of the government incentives are yet to be determined, they could potentially cover up to 27.5 percent of the investment amount, possibly reaching CZK 12.65 billion. Following the incentive approval, negotiations with the European Commission will take place, with construction slated to begin by spring 2025. The first products are expected to roll off the production line in 2027.

This investment represents one of the largest foreign direct investments in the Czech Republic, surpassing Hyundai's historical automotive investment. The Rožnov factory will not only strengthen local production capabilities but also position the Czech Republic as a key player in the semiconductor industry, crucial for sectors such as electric vehicles and artificial intelligence.

Currently, Onsemi's plants in the U.S. produce silicon wafers that are later processed in Moravia. The new facility aims to centralize production by handling everything from silicon carbide powder to final chip casings domestically, significantly reducing reliance on international supply chains.

"Our goal is to have a share of the European market of 40 percent," Cáb stated, highlighting the ambition to capture more of the market.

Cáb also pointed out the importance of qualified experts to attract further investments in the sector, as companies often base their decisions on available talent. Onsemi is already taking steps to nurture local expertise by collaborating with universities, including Brno University of Technology and Tomáš Bata University in Zlín. The new facility is projected to create hundreds of jobs, with up to 40 percent of those requiring university degrees.

The European Union is investing heavily in increasing domestic semiconductor production, aiming to boost the share of European chips from 10 percent to 20 percent. This strategic shift is crucial to reducing dependence on supplies from Asia, particularly as energy prices remain a concern.

In addition to Onsemi’s investment, the Czech government is preparing for a potential CZK 200 billion crown battery factory in the Karvinska region, which could further enhance the country's standing in the semiconductor and electric vehicle supply chains.