PM Fiala bets on US chip center to restart Czech economy

Prime Minister Petr Fiala said a potential chip manufacturing center by American company Onsemi in Rožnov pod Radhoštěm would be critical to restarting the Czech economy.

U.S. chipmaker Onsemi is considering a USD 2 billion investment to expand chip manufacturing at its plants in the U.S., South Korea, or Czechia. Production director Aleš Cáb told ČTK a decision could come by late February 2024.

Fiala called the investment one of the Czech Republic's most important strategic projects. "Chip manufacturing is something the Czech Republic needs, something Europe needs, and something that would boost our competitiveness," he said.

Demand is surging from sectors like energy and automotive due to issues like the coronavirus pandemic and Russia's war in Ukraine, Fiala noted. "We all remember supply chains being disrupted. This makes European projects such as this one even more important, ideally in the Czech Republic," he said.

Fiala said the chances of Onsemi investing in Rožnov pod Radhoštěm seemed significant. "For strategic investments in chip or battery production, the state must participate under current global rules," he said, assuring Onsemi officials the government is ready.

The government supports strategic investments in chip and battery production, he noted. The next steps involve approving amendments to investment incentive laws in parliament, which are expected to take effect early next year.

Cáb said the investment would be "groundbreaking" by consolidating Onsemi's complete silicon carbide production chain in Rožnov. Cáb told ČTK the investment would make Rožnov the first site in Europe to produce all processes to make silicon carbide chips, a technology saving up to 50 percent of electricity in some applications.

According to Onsemi, silicon carbide is critical for enabling efficiency in electric vehicles (EVs), EV charging, and energy infrastructure, and its use is an important step on the path to decarbonization.

If Onsemi invests, Rožnov would produce the complete chip manufacturing chain currently split between the U.S., Czech plant, and South Korea, Cáb added.