Onsemi scraps $2 billion expansion plan at Rožnov plant in Czech Republic

In brief

• US chipmaker onsemi has cancelled a planned $2 billion production expansion at its Rožnov pod Radhoštěm plant in the Czech Republic.
• The company cites market developments in silicon carbide, and says existing production is unaffected.
• The Czech industry minister said onsemi's production and investment in the country will continue.

Expansion plan dropped

Onsemi, the US semiconductor manufacturer also known as ON Semiconductor, has abandoned plans to expand production at its factory in Rožnov pod Radhoštěm, eastern Czech Republic. The planned investment was worth $2 billion, or roughly 43.5 billion crowns at the current exchange rate (Onsemi and Czech ministry cancel $2 billion chip facility expansion – Investing.com) (Rozsáhlá investice do ‚rožnovského Silicon Valley‘ se nekoná. Onsemi ruší plán na rozšíření výroby – iROZHLAS) (Výrobce polovodičů onsemi zrušil plány na rozšíření výroby v ČR za 43,5 miliardy – Seznam Zprávy). The company announced the decision in a press release on Friday (Tvrdá rána pro Česko. Mnohamiliardový plán investic výrobce polovodičů se ruší – iDNES.cz).

Reasons given

Onsemi attributes the cancellation to developments in the global market and a change in the economics of the project. The company said the decision is tied specifically to the market for silicon carbide and does not reflect its assessment of the investment climate in the Czech Republic, which it still considers an important part of its long-term production and growth strategy (Firma onsemi ruší plány na rozšíření výroby v rožnovském závodě – ČT24) (Američané zrušili plány na rozšíření firmy na výrobu polovodičů v Rožnově pod Radhoštěm – Novinky.cz).

What the plan involved

The 2024 plan aimed to build a complete production chain for silicon carbide, a material used in semiconductors, at Rožnov. The company also has a development centre at the site and another branch in Brno.

Existing operations

Current production at the Rožnov plant is not affected by the decision, onsemi said. The company has a long history at the site, tracing back to the former state enterprise TESLA. Its current operations include silicon and silicon carbide wafers, semiconductor chips, operational amplifiers, voltage regulators and automotive electronics.

Government response

Industry and Trade Minister Karel Havlíček said that production and investment by onsemi in the Czech Republic will continue. The mayor of Rožnov, Jan Kučera, described the news as bad for the town.