Onsemi Announces 2.74 Trillion KRW Investment
Government Officials Visit Roznov, Czech Republic
Expectations Rise for Czech Economy and EU Semiconductor Supply Chain Security
The quiet Czech rural village of 'Roznov pod Radhostem (Roznov)' is buzzing with activity. This is because the American semiconductor company ON Semiconductor announced plans to invest $2 billion (approximately 2.74 trillion KRW) to establish a technology hub. The European Union (EU) is also closely monitoring the situation, hopeful that the changes in the Czech village will help secure the semiconductor supply chain.
Bloomberg recently reported that since ON Semiconductor's investment announcement in June, government officials, real estate developers, local university representatives, and journalists have been visiting Roznov one after another. It is the first time in 30 years that a foreign company has announced such a large-scale investment in the Czech Republic, drawing widespread attention.
Roznov is a small town with a population of less than 20,000. It is famous for rum-soaked pies and the Wallachian Open Air Museum, which opened in 1925. This museum preserves wooden churches and houses built during the medieval period.
In this Roznov, ON Semiconductor is a representative foreign company revitalizing the local economy. ON Semiconductor acquired the Roznov factory facilities, which were spun off from Motorola in 1999, and has been operating them ever since. Currently, about 2,200 ON Semiconductor employees in the Czech Republic produce 10 million semiconductors annually, supplying companies such as Samsung Electronics, BMW, Mercedes-Benz, Apple, and Siemens.
With this new investment, Roznov's annual sales are expected to gradually expand to four times the current level over the next seven years, reaching at least $1.2 billion. The focus of the investment will be on producing highly profitable silicon carbide semiconductors, aiming to increase sales growth. Approximately 800 new jobs are expected to be created.
Bloomberg emphasized, "ON Semiconductor will expand its current site producing semiconductors used in electric vehicles and renewable energy industries," adding, "Success here is not only important for the region but also crucial for revitalizing the sluggish Czech economy and securing the EU's supply chain in the semiconductor dominance battle."
Based on this investment, the Czech Republic is seeking to move beyond traditional manufacturing industries such as automobiles and parts, aiming to transform into a profitable industry with lower labor intensity and higher technological capabilities. Josef Sikela, Czech Minister of Industry and Trade, stated, "Semiconductors are the foundation of the modern economy," and emphasized, "The more we produce domestically with these new technologies, the better it will be for our economic security."
ON Semiconductor is currently negotiating with the Czech and EU governments regarding the scale of subsidy support. Bloomberg expects that if discussions proceed smoothly, up to 25% of the investment amount could be covered by subsidies, and construction could begin as early as next year.
As the situation progresses rapidly after the investment, it has become important to secure living spaces for the expected increase in residents in the quiet rural village. The city, concerned about shortages of schools, hospitals, and housing, has decided to expand these facilities. Initially, 300 to 400 apartments will be built, and $85 million will be spent to expand roads and improve parking lots.
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