EU approves 450M boost for Onsemi’s SiC power chip plant

The European Commission has given the green light to a €450 million Czech support package aimed at Onsemi’s forthcoming Silicon Carbide (SiC) power semiconductor manufacturing plant in Rožnov pod Radhoštěm. This initiative will mark the establishment of the EU’s inaugural fully integrated SiC production line, covering everything from crystal growth to finished devices, with the commencement of commercial output slated for 2027.

For readers of eeNews Europe, this development represents a significant advancement for Europe’s power electronics supply chain and a substantial increase in SiC capacity within the region. It also opens up fresh possibilities for the automotive, renewable energy, and industrial power sectors, which are in search of reliable local sourcing.

A groundbreaking SiC facility in Europe

The €450 million direct grant from Czechia will bolster Onsemi’s broader €1.64 billion investment in the new fab. The facility is set to produce next-generation SiC devices with performance levels that are currently unparalleled in Europe, as stated by the Commission.

SiC power devices are becoming increasingly crucial in electric vehicles, fast chargers, solar inverters, and industrial power systems — all areas where European demand is surpassing local supply. The integrated manufacturing approach of the plant is anticipated to enhance resilience throughout the European semiconductor value chain, aligning with a key objective of the EU Chips Act.

As part of the support package, Onsemi has agreed to various conditions, including contributing to the advancement of the next generation of 200 mm SiC technology in Europe, prioritizing orders in case of supply shortages under the EU Chips Act, and backing workforce development through educational and training programs.

Onsemi has also submitted an application for the facility to be designated as an integrated production facility under the EU Chips Act, a separate approval process that is still in progress.

Reasons behind the Commission’s approval

The Commission sanctioned the measure under Article 107(3)(c) TFEU, which permits state aid for projects that foster specific economic activities under certain conditions. Its evaluation determined that the support is essential, proportionate, and carries an incentive effect, indicating that the investment would not materialize in the EU without public funding.

Brussels also assessed that competition risks are minimal due to the current lack of SiC production capacity in Europe and the strategic imperative to lessen dependence on imports. The project is anticipated to yield broad positive impacts for Europe’s semiconductor ecosystem, particularly in securing the supply of critical power electronics.

Teresa Ribera, Executive Vice-President for Clean, Just and Competitive Transition, underscored the strategic significance of the project: “This project will enhance the resilience of manufacturing industries and reduce external dependency for semiconductors. The chips to be manufactured at this plant are vital for green technologies, such as electric vehicles and charging stations, which are essential for Europe’s energy transition and environmental initiatives.”

With this endorsement, the Czech project becomes the eighth significant semiconductor manufacturing initiative cleared under the Chips Act framework, bringing the total authorized state aid for such projects to around €12.8 billion across the EU.