2 billion investment! After layoffs, ON Semiconductor invested heavily in expanding production
After announcing the layoff of 1,000 people, ON Semiconductor announced a new expansion plan: it will invest up to $2 billion to increase its semiconductor production in the Czech Republic, thereby expanding the company's production capacity in Europe.
On June 19, ON Semiconductor announced plans to build a state-of-the-art vertically integrated silicon carbide (SiC) manufacturing plant in the Czech Republic. The plant will produce the company's intelligent power semiconductors, which are essential for improving the energy efficiency of electric vehicles, renewable energy and artificial intelligence data center applications.
ON Semiconductor plans to expand silicon carbide production through a multi-year investment of up to $2 billion (44 billion Czech crowns), which is part of the company's previously disclosed long-term capital expenditure goals. The investment is based on ON Semiconductor's existing local operations, including silicon crystal growth, silicon and silicon carbide wafer manufacturing (polishing and epitaxy), and silicon wafer manufacturing. Today, the plant produces more than 3 million wafers per year, including more than 1 billion power devices.
Hassane El-Khoury, president and CEO of ON Semiconductor, said: "We look forward to better meeting our customers' growing demand for innovative technologies that improve the energy efficiency of their applications. Through close cooperation with the Czech Republic, this expansion will also enhance our production of intelligent power semiconductors, which is critical to helping ensure that the EU can achieve its goals of significantly reducing carbon emissions and environmental impact."
ON Semiconductor's project will be the largest one-time foreign direct investment in Czech history. The company plans to expand its operations in the eastern town of Roznov pod Radhostem to accommodate the entire production chain of silicon carbide semiconductors, including chip modules for end use in the automotive and renewable energy sectors.
The head of ON Semiconductor's power solutions division said the new production line could start production in 2027, but did not disclose further details about employment opportunities, production or expected revenue.
Silicon carbide chips are more expensive than traditional silicon-based chips, but are favored by automakers because they are more efficient, lightweight and durable. ON Semiconductor is one of only a few companies in the world that can manufacture silicon carbide-based semiconductors from crystal growth to advanced packaging solutions.
Just on June 14, it was reported that in order to streamline operations and reduce costs, ON Semiconductor will lay off approximately 1,000 employees worldwide and plan to integrate nine factories. In addition, approximately 300 employees will be reassigned or asked to relocate to another ON Semiconductor factory.
