US Onsemi to make record investment into chip production in Czechia
US chip maker Onsemi is planning to invest $2 billion in its production facility in Rožnov pod Radhoštem–the biggest single foreign investment in Czechia’s modern history. The company’s chip production in Czechia would shoot up by hundreds of percent, boosting value-added production, creating thousands of new jobs and contributing more than CZK 6 billion annually to the country’s GDP.
Onsemi considered three possible locations for its planned 2 billion dollar investment –the US, South Korea and its existing production facility in the eastern Czech town of Rožnov pod Radhoštem. Czechia won out largely thanks to its automotive industry. The company’s intelligent power semiconductors are essential for improving the energy efficiency of applications in electric vehicles, renewable energy and AI data centres. Forty percent of its production goes into the car industry and Germany’s Volkswagen, which owns Skoda Auto, is a strategic partner for Onsemi.
Prime Minister Petr Fiala said the expansion of chip production in Rožnov would be a significant boost for the Czech industry.
“The investment is a huge success for Czechia because this is a strategic area that we wanted to develop. This is not the acquisition of an assembly plant, it is the acquisition of a centre of modern technologies, of production with high added value.”
Onsemi currently produces 10 million chips a day in Rožnov. The investment would increase production by hundreds of percent, the government said. According to estimates, the number of jobs created in Rožnov will increase to 3,000 from the current 1,700. The quality of jobs in downstream sectors will also increase, which could lead to higher wages throughout the region.
Industry Minister Josef Sikela expects that most of the new jobs will be filled by Czech employees. Onsemi already cooperates closely with Czech universities and research institutions and it can be expected that it will further develop this cooperation. If the Czech labour market cannot offer enough experts, the Czech Republic will look for highly qualified workers in other countries, Sikela said.
According to the minister this investment project will improve Czechia’s standing in the eyes of other foreign investors, and along with the growth of the connected supply chain, will strengthen the country's export potential.
According to Onsemi’s estimates the expanded plant would contribute more than CZK 6 billion annually to the Czech Republic's gross domestic product (GDP).
The Czech government will negotiate with Onsemi in the coming months about incentives.
According to a government source citied by Czech Radio, the investment support should have roughly three parts. Firstly, a tax holiday, which is normally granted for 10 years. Secondly, some form of direct support for the investment from the state budget, which could be reach 10 billion crowns. And thirdly, incentives linked to the European program to promote self-sufficiency in chip manufacturing. The so-called European Chip Act entered into force last September. In it, the EU committed to support investment in this area to the tune of more than EUR 43 billion by 2030.
