The European Commission officially greenlit a €450 million state aid package for US-based Onsemi, supporting a total $2 billion (£1.6 billion) expansion in Rožnov pod Radhoštěm. While the headlines focus on the massive output of chips for EVs, the deeper story for the 2026 business landscape is the "cluster effect."

The investment has fast-tracked the growth of the Czech National Semiconductor Cluster, a network of smaller domestic firms that provide specialized engineering, chip design, and high-tech manufacturing equipment. This shift is turning the Czech Republic from a "component assembler" into a vertically integrated "Silicon Valley of Central Europe." Smaller Czech innovators, such as the Brno-based processor designers Codasip, are increasingly collaborating within a domestic framework, reducing reliance on non-European intellectual property.

For UK businesses, this means the Czech Republic is no longer just a source of raw parts, but a sophisticated partner for co-development in AI, automotive electronics, and power management. The government’s strategy aims to triple the size of the national semiconductor sector by 2029, focusing heavily on supporting smaller startups through the new Czech Semiconductor Centre. For UK investors and tech partners, this burgeoning supply chain offers a resilient, "nearshored" alternative to Asian markets, backed by a robust network of local technical universities and specialized SMEs.

Source: European Commission, Czech Semiconductor Centre

Prepared by the CzechTrade United Kingdom & Ireland team.