The European Commission has approved the Czech plan to provide state aid in the volume of EUR 450 million for the expansion of onsemi’s production operations in Rožnov pod Radhoštěm. The American semiconductor manufacturer is expected to invest EUR 1.64 billion in the new factory. The provision of aid now must be approved by the Czech government.
The new factory will be the first of its kind in the European Union. The American investor plans to manufacture smart high-performance semiconductors serving to improve the energy efficiency of electric vehicles, renewable sources of energy and data centres using artificial intelligence. Production will be linked to the plant’s current operations, in which silicon crystals and silicon chips are manufactured. According to the original plans, the factory should use innovative manufacturing technologies and produce products with outstanding performance that are not currently available in Europe.
“This project will improve the resilience of the manufacturing industry and reduce external dependence on semiconductors. The chips that will be manufactured in this factory are of key importance for green technologies such as electric vehicles and charging stations, which are necessary for Europe’s energy transformation and green initiatives,” said Teresa Ribera, Executive Vice-President of the European Commission for a Clean, Just and Competitive Transition, in a press release.
The European Commission explained the approved aid as having a motivational effect, as the recipient would not have implemented this investment in Europe without state aid. The Commission’s justification of its approval of state aid consisted in the broad positive impacts of the investment on the European semiconductor ecosystem and the strengthening of security of supplies within Europe. The investor is expected to establish a manufacturing plant in Czechia with the aim of fulfilling priority orders for production in Europe in the event of a supply crisis, as defined in the EU Chips Act.
“In accordance with the Economic Strategy: Czechia to the Top 10, the expansion of chip production in Rožnov, where onsemi plans to invest two billion US dollars, will have positive economic and strategic benefits for our country. Besides the addition of well-paid jobs, the investment should also bring about the extensive involvement of Czech companies, universities and research institutions, which will collaborate on the development and supply of technologies,” outgoing Minister of Industry and Trade Lukáš Vlček stated on the ministry’s website.
“This is good news for both the Czech and European semiconductor industry. In cooperation with the Ministry of Industry and Trade, CzechInvest is continually in contact with onsemi regarding the implementation of this strategic investment,” add Jan Michal, CEO of CzechInvest.
The American company onsemi was established in 1999. In has been operating in Rožnov pod Radhoštěm since 2003 under the name ON Semiconductor Czech Republic, which was established through a merger of the companies Tesla Sezam and Terosil.