Onsemi plans $2 billion semiconductor expansion in Czech Republic – The Business Journals
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Scottsdale-based Onsemi is planning to invest $2 billion over multiple years to expand silicon carbide production at its fab in the Czech Republic.
Onsemi is investing $2 billion to boost silicon carbide production at its semiconductor manufacturing plant in the Czech Republic, the Scottsdale-based company announced Wednesday.
ON Semiconductor Inc. (Nasdaq: ON), which does business as Onsemi, is expanding the company’s existing high-volume fab site in Roznov pod Radhostem, where it produces more than three million wafers annually. The announcement follows reporting last week that Onsemi will lay off 1,000 workers as part of an effort to cut costs.
The investment in the Czech Republic will be made over multiple years and is intended to strengthen Onsemi’s supply chain for its European and global customers. Onsemi plans to ramp up silicon carbide production at the site by 2027, depending upon how quickly it’s able to “finalize its engagement with the Czech Republic government and the European Commission,” the company told the Business Journal.
“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,” Hassane El-Khoury, president and CEO of Onsemi, said in a statement.
The investment is part of Onsemi’s previously disclosed “long-term capital expenditure target.” It marks one of the largest private sector investments in the Czech Republic’s history, according to a company release.
“Through a close collaboration with the Czech government, the expansion would also enhance our production of intelligent power semiconductors that are essential to helping ensure the European Union is able to achieve its ambitions to significantly reduce carbon emissions and environmental impact,” El-Khoury said.
Onsemi’s expansion is expected to create 1,300 new jobs in Roznov pod Radhostem, where it currently employs 1,700 people. The company is negotiating with the Czech government about incentives for its planned expansion, Reuters reported.
“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,” Jozef Síkela, minister of industry and trade of the Czech Republic, said in a statement. “This investment not only strengthens our position in the semiconductor field but can also contribute to the development of the automotive industry and help us with its adaptation to the rise of electromobility.”
Onsemi is the most recent semiconductor manufacturer to announce plans to ramp up silicon carbide chip manufacturing in Europe. STMicroelectronics is building a high-volume silicon carbide facility in Italy, while Intel and TSMC both have plans to build manufacturing plants in Germany.
Onsemi is laying off roughly 1,000 workers and consolidating its global corporate footprint as it seeks to cut costs amid a slowdown in one of its key product markets.
The company is consolidating nine sites to “realign its resources and drive organizational efficiencies” and expects to complete its workforce reduction in 2025, the Business journal previously reported.
Onsemi had 30,000 workers globally as of Dec. 31, according to the company’s annual report.
While Onsemi reported progress toward mass production of 200-millimeter silicon carbide wafers in the first quarter, it encountered incremental softness in the semiconductor market as customers, notably in the EV sector, grappled with excess inventory.
El-Khoury told investors and analysts on the company’s first quarter earnings call in April that it remains “laser focused” on gaining market share for silicon and silicon carbide and sees EVs, data centers and advanced safety applications as long-term drivers of growth.
Onsemi recently gained approval for tenant improvements at Diablo Technology Park in Tempe, where it plans to move its development and testing lab from its former Phoenix location. The city of Tempe issued three building permits to Onsemi in early May for tenant improvement work at 2900 S. Diablo Way.
Shares of Onsemi closed at $67.63 a share on Thursday, down 4.3%.
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