US chipmaker Onsemi is enhancing its Roznov pod Radhostem plant in the east of Czechia in a $2bn (€1.9bn) investment that is set to be one of the largest foreign investment in the country’s history.  The plant will enable Onsemi to do end-to-end silicon carbide production for advanced power semiconductors, in what it said was one of the first investments in advanced semiconductor manufacturing in Central Europe. 

“This investment is not just the figure, but with its significance, its impact on European industry, its worldwide reach, it can become one of the most significant investments the Czech Republic has ever made,” the country’s Minister of Industry and Trade Jozef Sikela told Czech media.

The investment will surpass the three previous major investments that were all related to the car industry and include the Hyundai Motor Manufacturing and Toyota Peugeot Citroen plants made in the 2000s. South Korean Nexen Tire also opened a major plant in 2019.  

Sikela stressed the investment will bring about the development of related supply chains and technological education in the country, highlighting that Czechia “is an interesting destination for foreign investors”.

“This investment not only strengthens our position in the semiconductor field but can also contribute to the development of the automotive industry and help us with its adaptation to the rise of electromobility,” he said in a press release.

The investment will also lead to an increase of people employed at the existing plant by some 1,300 to 3,000. Sikela expects the jobs to be taken up by local workers but did not rule out that qualified workers from other countries may be needed, given the country's tight labour market.

The announcement comes as the Czech cabinet increased annual quotas for employing graduates of Indonesian technological schools from 150 to 1.000. Earlier this month, the cabinet also softened its strict rules to access the tight Czech labour market, in an effort to attract more workers from Europe’s south and Asia.

The cabinet also opened the labour market to foreigners from the USA, Great Britain, Australia, Canada, Japan, New Zealand, South Korea, Israel and Singapore, who will no longer need work permits. Changes have been made valid as of July.

Onsemi said it was discussing incentives with the government.

"Our brownfield investment would establish a Central European supply chain to better service our customers’ rapidly increasing demand for innovative technologies that improve the energy efficiency in their applications,” said Hassane El-Khoury, president and CEO. “Through a close collaboration with the Czech government, the expansion would also enhance our production of intelligent power semiconductors that are essential to helping ensure the European Union is able to achieve its ambitions to significantly reduce carbon emissions and environmental impact.”  

The company’s current operations in the Czech Republic  include silicon crystal growth, silicon and silicon carbide wafer manufacturing (polished and EPI) and a silicon wafer fab. Today, the site can produce more than three million wafers annually, including more than one billion power devices. Upon completion, the operation would contribute annually more than $270 million (CZK6 billion) to the country’s GDP, it said.