Onsemi Abandons $2 Billion Czech Silicon Carbide Expansion

Onsemi and the Czech Ministry of Industry and Trade jointly confirmed on Friday, November 6, 2026, that they will not proceed with the planned silicon carbide expansion at the company's plant in Rožnov pod Radhoštěm — a project originally announced at up to $2 billion in June 2024.

The decision ends what was once one of the largest semiconductor commitments in Central Europe and redirects the company's capital toward AI data center power, where revenue grew 175% year over year in the third quarter. For a company now worth $24.65 billion, the cancellation marks a pivot from electric vehicle silicon carbide — the material used to make power chips that handle high voltage efficiently, and which EV drivetrains and chargers use in volume — to the power infrastructure behind AI compute.

The stock barely reacted to the announcement itself. ON closed at $63.20, up 0.30%, after the news arrived late in the session. The damage came earlier. Shares fell 23.27% over the past month during a broad chip selloff, and the closing price sits roughly 53% below the 52-week high of $134.92.

What Exactly Was Canceled?

Onsemi dropped the expansion with the ministry's agreement. The company tied the decision to changes in the global silicon carbide market and in the project's economics since the original 2024 announcement, and it said the decision carries no judgment about the Czech investment climate.

Only the expansion is dead. Current silicon and silicon carbide production at Rožnov continues, and onsemi expects to keep investing and hiring at Rožnov and at its Brno site.

First Deputy Prime Minister and Industry Minister Karel Havlíček said the decision shows "the current situation in the global semiconductor market."

Neither side disclosed a write-down, a charge, or any terms for returning state aid. The most recent onsemi 8-K filing is dated November 2, 2026, so none of these costs have been filed yet — a gap investors will watch in coming filings.

How Did a $2 Billion Plan Come Apart?

The timeline shows a steady unwind over more than two years.

• June 2024: Onsemi announced a brownfield investment of up to $2 billion to produce silicon carbide chips start to finish at Rožnov, mostly for electric vehicles. CzechInvest estimated the project at more than CZK 44 billion.
• Later approval: The European Commission approved €450 million ($518 million) in Czech aid against planned onsemi spending of €1.64 billion — a figure already well below the "up to" headline number.
• June 2026: Czech press reported that 200 to 300 job cuts were planned at Rožnov, on top of about 170 in 2025. The same report said onsemi had concluded that making its own wafers no longer paid as cheaper Chinese wafers entered the market. The company did not comment at the time.
• August 3, 2026: Havlíček said the conditions attached to the state aid were no longer being met.
• November 6, 2026: Both parties confirmed the cancellation.

Why Did Owning Wafer Supply Stop Paying?

The 2024 plan rested on one assumption: strong electric vehicle demand. Demand came in below that forecast. At the same time, cheap Chinese wafers pushed prices down to the point where buying wafers now costs less than building a factory to make them.

The economics of vertical integration flipped within two years, and onsemi chose the market over the factory.

The cash is flowing to AI data center power instead. The numbers from the most recent quarter frame the shift:

• Third-quarter revenue: $1.722 billion, up 11%.
• AI data center revenue: grew 175% year over year.
• AI data center revenue in absolute terms: $180 million.
• Automotive revenue in the same quarter: $777 million.

Onsemi has also moved on the acquisition front. The company agreed to buy Ferric for $600 million plus up to $175 million in milestone payments, and it raised its 2030 AI data center revenue goal to more than $3 billion. That figure remains a target the company has yet to reach.

The scale mismatch matters. AI data center revenue, despite its growth rate, stood at less than a quarter of automotive revenue in the third quarter. And if electric vehicle demand recovers, onsemi will have less wafer capacity to meet it — a structural consequence of Friday's decision that cannot be reversed quickly.

What Comes Next for Onsemi?

The project had stopped making economic sense, and dropping it cuts capital spending at a moment when quarterly free cash flow reached $488.6 million. Freeing that capital strengthens the balance sheet even as it narrows the company's exposure to the EV supply chain.

Fourth-quarter revenue guidance of $1.715 billion to $1.815 billion is the near-term test. Two events would change the picture: revenue landing below that range, or an 8-K filing showing a large Rožnov charge or an aid repayment. Until either appears, the cancellation reads as a disciplined exit from a bet the market invalidated.

The broader signal extends past one company. Onsemi's retreat from Czech wafer manufacturing shows how cheap Chinese silicon carbide supply and softer EV demand can erase the case for vertically integrated chip plants in Europe — while AI data center power, growing at triple digits from a small base, pulls capital in the opposite direction.