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U.S. chipmaker Onsemi (NASDAQ: ON) announced on June 19 its plans to invest up to $2 billion to enhance semiconductor production in the Czech Republic, marking the largest single foreign investment in the country's history. This move aligns with the European Union's goal of achieving self-sufficiency in critical supplies.

The project, pending state aid approval, will expand Onsemi's operations in Roznov pod Radhostem, establishing a complete production chain for silicon carbide semiconductors, which are crucial for the automotive and renewable energy sectors. This investment mirrors recent expansions by STMicroelectronics in Italy, and Intel and TSMC in Germany.

Onsemi's new facility will produce intelligent power semiconductors to improve energy efficiency in electric vehicles, renewable energy, and AI data centers. Silicon carbide chips, though pricier than standard silicon ones, are favored by automakers for their energy efficiency, lightweight, and durability.

Supply chain disruptions during the COVID-19 pandemic and rising trade tensions with China have intensified Europe's focus on reducing reliance on Asian chip supplies. Czech Prime Minister Petr Fiala highlighted the significance of this investment, noting it would significantly boost current production levels.

Onsemi's Power Solutions Division head, Simon Keeton, mentioned that production could begin in 2027 but did not provide additional details on job creation, production volumes, or expected revenue. The investment is within the company's capital expenditure target and follows its announcement last week of about 1,000 job cuts among its 30,000-strong workforce.←

The Czech Industry and Trade Ministry indicated that state aid could cover up to 27.5% of the total investment, with approval expected by early 2025. This investment underscores Onsemi's role in strengthening the EU's semiconductor value chain, benefiting from the European Chips Act.

A multinational group listed on the Nasdaq exchange, Onsemi has 33,000 employees worldwide, including 2,200 staff in its three Czech plants. The largest one, ON Semiconductor Czech Republic, produces chips and silicon wafers in the eastern town of Roznov pod Radhostem, employing more than 1,700 people.

Editor：Lulu

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