The European Commission has approved, under EU State aid rules, a €450 million (CZK 12 billion) Czech measure to support US chipmaker Onsemi in setting up a novel integrated chip manufacturing plant for Silicon Carbide ('SiC') power devices in Rožnov pod Radhoštěm. The measure will contribute to increasing the EU's technological autonomy in semiconductor technologies, in line with the objectives set out in the European Chips Act Communication and the Political Guidelines for the European Commission 2024-2029 . The measure will also contribute to accelerating the digital and green transitions.
The Czech measure
Czechia notified the Commission of its plan to support Onsemi to build an integrated chip manufacturing plant for SiC power devices, which are crucial to enable efficient, compact, high-performance power electronics used in electric vehicles, fast-charging stations, renewable energy generation and other industrial applications. The integrated plant will cover all manufacturing steps from SiC crystal growth to finished devices.
The aid will take the form of an approximately €450 million (CZK 12 billion) direct grant to Onsemi to support the company's €1.64 billion (CZK 39.6 billion) investment. The new facility, which is expected to start commercial operations by 2027, will be first-of-a-kind in the EU. The plant will use innovative manufacturing technologies and manufacture products with superior performance, currently not present in Europe.
Under the measure, Onsemi agreed to:
- ensure that the project will have a broader impact with positive effects on the EU semiconductor value chain;
- contribute to the development of the next generation of the 200 mm SiC technology, and to optimise manufacturing in the EU;
- implement priority-rated orders in case of a supply shortage in line with the European Chips Act ; and
- develop and deploy educational and skills training to increase the pool of qualified and skilled workers.
In January 2025, Onsemi applied for the recognition of the facility in Rožnov pod Radhoštěm as an integrated production facility under the European Chips Act. This process is independent from the State aid assessment.
The Commission's assessment
The Commission assessed the Czech measure under EU State aid rules, in particular Article 107(3)(c) of the Treaty on the Functioning of the EU ('TFEU'), which enables Member States to grant aid to facilitate the development of certain economic activities subject to certain conditions, and based on the principles set out in the European Chips Act Communication .
The Commission found that:
- The measure facilitates the development of economic activities, by enabling the establishment of an integrated manufacturing facility for SiC devices in Europe;
- The facility is first-of-a-kind in Europe;
- The aid has an 'incentive effect', as the beneficiary would not carry out this investment in Europe without public support;
- The measure has a limited impact on competition and trade within the EU, as it addresses a part of the European market where supply from manufacturers based in the EU is not sufficient for ensuring sufficient resilience to the European supply chain;
- The measure is necessary and appropriate to ensure the resilience of Europe's semiconductor supply chain. In addition, the aid is proportionate and limited to the minimum necessary based on a proven funding gap (i.e. the aid amount necessary to incentivise the investment by the beneficiary that otherwise would not take place). Finally, Onsemi has agreed to share with Czechia potential profits beyond current expectations;
- The measure has wide positive effects for the European semiconductor ecosystem and contributes to strengthening Europe's security of supply. It sets up an integrated manufacturing facility which commits to comply with priority-rated orders to produce in Europe in case of a supply crisis, as defined in the EU Chips Act Regulation. The integrated manufacturing facility in Rožnov pod Radhoštěm will help reverse the tendency of overreliance on semiconductor devices manufactured outside of Europe. The Commission also took note that Onsemi applied for the facility to be recognised as an Integrated Production Facility under the EU Chips Act Regulation and will comply with all obligations linked to this status.
On this basis, the Commission approved the Czech measure under EU State aid rules.
Background
On 8 February 2022, the Commission adopted the European Chips Act Communication . It is part of a comprehensive Chips Act package , which also included the European Chips Act that entered into force on 21 September 2023.
In the European Chips Act Communication , the Commission recalled that investments in new advanced production facilities in the semiconductor sector are important to safeguard the EU's security of supply and supply chain resilience, while generating significant positive impacts to the wider economy. The Commission recognised in that Communication also a number of factors relevant for a case-by-case assessment directly under Article 107(3)(c) TFEU.
Today's approval is the eight decision by the Commission based on these principles. Past approved measures account for a cumulative aid of around €12.8 billion, provided by different Member States and supporting the manufacturing of different semiconductor technologies and applications.
