US chipmaker ON Semicon is expanding its Rožnov pod Radhoštěm facility in the eastern Czech Republic with a $2 billion (€1.9 billion) investment, expected to be one of the largest foreign investments in the country’s history. The facility will enable ON Semicon to produce silicon carbide for advanced power semiconductors from end-to-end and marks one of the first investments in advanced semiconductor manufacturing in Central Europe, the company said.
“This investment is not just about its value, but also its importance, its impact on European industry and its global reach, making it potentially one of the most important investments the Czech Republic has ever made,” the country’s Industry and Trade Minister Josef Sikela told Czech media.
The investment eclipses the three previous big auto-related investments made in the 2000s, including plants by Hyundai Motor Company and Toyota Peugeot Citroen. South Korea’s Nexen Tire also opened a large factory in 2019.
Sikela stressed that the investment will develop related supply chains and technical education in the Czech Republic, making the country an interesting destination for foreign investors.
“This investment will not only strengthen our position in the semiconductor sector, but will also contribute to the development of the automotive industry and help it adapt to the rise of electric vehicles,” he said in a press release.
The investment will also increase the workforce at the existing plant by around 3000 people, from 1300. Sikela hopes the jobs will be filled by local workers, but he does not rule out the need for skilled workers from other countries, given the tight domestic labour market.
The announcement came after the Czech government increased annual employment quotas for Indonesian technical school graduates from 150 to 1,000. Earlier this month, the government also relaxed strict rules on access to the Czech Republic’s tight labor market in a bid to attract more workers from southern Europe and Asia.
The Cabinet also opened up the labour market to foreigners from the US, UK, Australia, Canada, Japan, New Zealand, South Korea, Israel and Singapore, who will no longer need work permits. The change took effect in July.
Onsemi said it is in discussions with the government about incentives.
“Our brownfield investment establishes our Central European supply chain to better serve our customers’ surging demand for innovative technologies that improve the energy efficiency of their applications,” said Hassan El Khoury, president and CEO. “Through close collaboration with the Czech government, this expansion will also enhance our production of intelligent power semiconductors, which are essential to helping the European Union achieve its goal of significantly reducing carbon emissions and environmental impact.”
The company’s current operations in the Czech Republic include silicon crystal growth, silicon and silicon carbide wafer manufacturing (polishing and EPI), and a silicon wafer fab. Currently, the facility has an annual production capacity of more than 3 million wafers, including more than 1 billion power devices. Once complete, the company says the operation will contribute more than $270 million (CZK 6 billion) annually to the Czech Republic’s GDP.
