Chips – Czechia's next superpower?
26 June 2024
US semiconductor manufacturer and chip producer Onsemi wants to invest $2 billion (€1,8 billion) to expand production at its plant in Rožnov pod Radhoštěm in Czechia. The company's chip factory there is expected to increase dramatically, contributing more than €240 million (almost 1%) annually to the country's GDP. The investment is the biggest in the country since the split of Czechoslovakia in 1993 and according to prime minister Petr Fiala would multiply the current output of 10 million chips per day by hundreds percent at their plant in Czechia’s east.
Investments of this scale are not common in the Czech Republic. Politicians say Onsemi's investment will bring more attractive jobs to the region. It could also increase wages and stimulate more investment in infrastructure or housing construction. In the long run, the US investments could lead to a higher attractiveness of Czechia for the high-tech sector as well, according to experts.
 | Eliška Drobná During Covid-19, Europe experienced a crisis situation when chips stopped flowing from Asian production factories. It's because of those shortages that the EU wants to double its chip production capacities until 2030. To do that, the European Commission passed the Chips Act last year, which aims to incentivise public and private investment in chip production. The act has had its first successes: Onsemi's move follows investments by STMicroelectronics in Italy and by Intel and TSMC in Germany. The EU hopes that attracting these large foreign investors will make Europe more self-sufficient in the future and simultaneously boost the economies of chosen countries like Czechia. In this rare scenario, even the Czech opposition has welcomed the U.S. investment. Sceptical voices only fear that the investment agreement has a condition for the state to pay a financial incentive (an investment from the state). This could amount to around CZK 10 billion (around €6 million). Experts agree, however, that the investment will pay the state back many times over. |
Welcome to The European Correspondent
Europe lacks true European media: in Germany alone, there are more media devoted exclusively to football than news outlets specialising on Europe. The established players mainly focus on Brussels and European institutions. The European Correspondent aims to change that. We cover the whole of Europe and write for a community of citizens who want to look beyond their own national borders. Without European journalism, there is no European civil society.
〉Read our manifesto
〉The stories we would like to write for you
Become a donor!
The European Correspondent is fully funded by its readers. We can only produce the newsletter with your support - and work towards the bigger project: building true European media. Donate now!
With your help, we can create true European journalism. Thank you!
We are non-profit. Every donated € goes directly into The European Correspondent.