Onsemi, formerly ON Semiconductor, is expanding its global manufacturing footprint to address critical supply chain concerns. The company, which produces power chips and sensors for electric vehicles, recently announced a multi-year $2 billion investment in a new Czech Republic facility. According to Reuters, Onsemi’s latest investment is the “largest one-off direct foreign investment in the Czech Republic” by any company to date. If approved by regulators, chip production is expected to begin as early as 2027.
A Strategic Move in the Global Chip Market
The company’s strategic move comes as U.S. chip manufacturers face increasing global competition and political challenges. Several countries, including India, China, South Korea, Japan, and Taiwan, are ramping up investments in their domestic semiconductor industries. Onsemi is leaning into the Czech Republic, especially to boost its European capacity as the European Union diversifies away from Chinese suppliers. This Czech government collaboration is part of what Onsemi CEO Hassane El-Khoury describes as the company’s investment in a “central European supply chain.” The new facility will handle the complete production process for silicon carbide (SiC) chips, from raw materials to finished products. This includes manufacturing Onsemi’s intelligent power semiconductors, which are critical components in electric vehicles, AI data centers, and renewable energy systems.
Onsemi’s investment in a new Silicon Carbide (SiC) facility allows the company to capitalize on the growing demand for this advanced semiconductor material. SiC chips offer significant advantages over traditional silicon, including better power handling, faster operation, and improved heat management. They help our electric cars go farther on a single charge, make solar panels more efficient, and help factories use less energy.
Vision for Growth and Market Leadership
Onsemi’s CEO emphasized the company’s strategic direction and market positioning during the recent Q2 earnings call, highlighting its commitment to growth and innovation in key sectors. El-Koury, stated, “We remain dedicated to driving growth through market share gains, doubling down on investments in strategic markets, and expanding the breadth of our portfolio of industry-leading products with analog and mixed-signal solutions . . . As reflected by our recent supply agreement with Volkswagen Group, we also continue to strengthen our silicon carbide leadership position in automotive as we ramp production with leading global OEMs in Europe, North America, and China.”
Working Around The China Conundrum
China is the world’s largest consumer market for semiconductor tools and technologies. So, Onsemi’s investment in the Czech Republic also highlights a common challenge faced by many chip makers—how to balance their presence in the profitable Chinese market while managing risks posed by China’s drive towards semiconductor independence. Nikkei Asia reports that the Chinese government is actively “urging the country’s top automakers to source up to a quarter of their chips locally by 2025” and abandon chips from international semiconductor firms. This push for self-sufficiency is partly a response to extensive U.S. sanctions on Chinese tech companies. As the Chinese look inward to protect their interests, companies like Onsemi are well advised to proactively develop infrastructure and diversify their customer base beyond China to remain competitive.
Audrey Sivasothy is a Houston-based technical writer with extensive experience in regulatory compliance, quality auditing, and policy analysis. Her expertise spans medical, defense, and aerospace industries, including over a decade in semiconductor distribution compliance. Audrey’s writing combines her technical industry knowledge with policy and legal insights and offers readers a unique perspective on major industry regulations, news, and developments. Sivasothy is a graduate of Rice University and a JD candidate specializing in business and compliance law.
