US chipmaker Onsemi has announced it will invest up to $2 billion to establish a silicon carbide manufacturing facility in the Czech Republic.

The project would represent the largest one-off direct foreign investment in the country.

Described by Onsemi as a “state-of-the-art, vertically integrated silicon carbide (SiC) manufacturing facility,” the investment would expand on the company’s current operations in Roznov pod Radhostem – a town in the east of the country – which includes silicon crystal growth, silicon and silicon carbide wafer manufacturing (polished and EPI) and a silicon wafer fab.

Silicon carbide is a synthetically produced crystalline compound of silicon and carbon. The material provides several advantages over conventional silicon for power applications, including better thermal conductivity, higher switching speeds, and lower dissipation, making it particularly suitable for the manufacturing of high-voltage power devices.

The chips produced at Onsemi’s plant would be used to improve the energy efficiency of applications in electric vehicles, renewable energy, and AI data centers.

The news comes in the same month that STMicroelectronics announced it would invest $5.43bn to build a high volume 200mm silicon carbide (SiC) chip manufacturing facility in Catania, Italy.

"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 of Onsemi. “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.”

Information about any financial incentives provided to Onsemi under the EU Chips Act has not been disclosed.

However, although the company is looking to expand its European operations, last week Onsemi announced it would be cutting 1,000 jobs globally whilst consolidating nine sites and reassigning or relocating a further 300 employees in order to streamline operations and reduce costs.

In 2023, the company cut 1,900 jobs citing similar cost-saving reasons.