American chipmaker onsemi has announced plans to invest up to $2bn (Kč46.3bn)to establish a silicon carbide (SiC) semiconductor manufacturing facility in the Czech Republic.  

The investment aims to meet the growing semiconductor demands fuelled by electrification, renewable energy, and artificial intelligence (AI).  

onsemi’s proposed plant will focus on producing power semiconductors crucial for enhancing energy efficiency in electric vehicles, renewable energy systems, and AI data centres. 

Silicon carbide is an essential material for high-power, high-temperature applications, known for its challenging production process.  

The chipmaker stated that this move represents one of the largest private sector investments in the Czech Republic and is one of the first investments in advanced chip manufacturing in Central Europe. 

onsemi is currently in negotiations with the Czech government for an incentive package to support the investment. 

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The Czech Industry and Trade Ministry indicated that state aid could amount to 27.5% of the total investment, as per Reuters.  

The approval of the incentive, which includes notification to the European Commission, is expected by the first quarter of 2025.  

This new investment will expand on onsemi’s existing operations in the Czech Republic, which encompass silicon crystal growth, silicon and silicon carbide wafer manufacturing, and a silicon wafer fab. 

onsemi president and CEO Hassane El-Khoury said: “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.  

“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.”   

The Czech Republic Minister of Industry and Trade Jozef Síkela said: “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’s move follows similar investments by other semiconductor companies such as STMicroelectronics in Italy, and Intel and TSMC in Germany.