Published:05.07.2024
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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.

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.

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. 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.

Source: Czech Radio

Prepared by the team of foreign offices CzechTrade Osaka and Tokyo