Onsemi Cancels $2 Billion Rožnov Silicon Carbide Expansion

Onsemi and the Czech Ministry of Industry and Trade confirmed on November 6, 2026, that they will cancel a silicon carbide expansion worth up to $2 billion at the company’s Rožnov pod Radhoštěm plant. The decision removes planned capacity but leaves the fab’s current silicon and silicon carbide production running.

Silicon carbide power chips convert high voltage efficiently, making the material useful in electric vehicle drivetrains and chargers. The canceled project had aimed to expand that supply, mostly for electric vehicles.

Onsemi closed at $63.20 after the news arrived late in the session, a gain of 0.30%. Before that announcement, the shares had fallen 23.27% over the previous month during a broad chip selloff. They ended about 53% below the 52-week high of $134.92, leaving onsemi with a stated value of $24.65 billion.

What does onsemi cancel at Rožnov?

The cancellation does not shut Rožnov, where current silicon and silicon carbide production continues. Onsemi expects to keep investing and hiring at both Rožnov and its Brno site, although those plans remain company expectations rather than committed spending figures.

First Deputy Prime Minister and Industry Minister Karel Havlíček said the move reflected “the current situation in the global semiconductor market.” Onsemi linked the decision to changes in global silicon carbide market conditions and the project’s economics since its 2024 announcement. It also said the decision did not indicate any deterioration in the Czech investment climate.

Neither onsemi nor the ministry disclosed a write-down, a financial charge, or terms for returning state aid. The company’s most recent 8-K carried a November 2, 2026 date, so none of those costs had yet appeared in a filing. Existing output remains available, but onsemi has abandoned the capacity increase planned beside it.

How did the $2 billion plan lose its economics?

In June 2024, onsemi announced up to $2 billion for a brownfield expansion at Rožnov, where the company planned to produce silicon carbide chips from start to finish, mostly for electric vehicles. CzechInvest estimated the project at more than CZK 44 billion.

The European Commission later approved €450 million ($518 million) in Czech aid against planned onsemi spending of €1.64 billion. That spending figure was well below the original “up to” amount. On August 3, 2026, Havlíček said the conditions attached to the aid were no longer being met.

Czech press reported in June 2026 that onsemi planned 200 to 300 job cuts at Rožnov, on top of about 170 cuts 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 that time.

The original plan assumed strong electric vehicle demand, but demand came in below expectations and Chinese wafer prices fell. Buying wafers then cost less than building a factory to produce them, which removed the economic case for the expansion. The project lost its intended supply advantage before the added capacity could start.

Where is onsemi directing capital now?

Onsemi is directing capital toward AI data center power as the automotive business faces weaker near-term conditions. Third-quarter revenue reached $1.722 billion, up 11%, while AI data center revenue grew 175% from the prior year.

The AI business remains small despite that growth. Third-quarter AI data center revenue was $180 million, compared with $777 million from automotive, so AI still supplied only a fraction of the company’s sales. If EV demand recovers, onsemi will have less wafer capacity available to meet it.

Onsemi also agreed to acquire Ferric for $600 million plus up to $175 million in milestone payments. It raised its 2030 AI data center revenue goal to more than $3 billion, a target the company has not yet reached. AI power is growing faster, but it remains much smaller than automotive.

What will test the canceled expansion thesis?

Canceling the project lowers onsemi’s prospective capital spending at a time when quarterly free cash flow reached $488.6 million. That matters because the company still expects to invest and hire in the Czech Republic while pursuing AI data center growth.

The next financial test is fourth-quarter revenue guidance of $1.715 billion to $1.815 billion. The stated downside trigger is a result below that range.

The next 8-K also matters because it may disclose a large Rožnov charge or an aid repayment. Either event would weaken the case that lower capital spending and AI growth can offset the loss of planned EV capacity. The commercial shift will depend on AI data center demand sustaining onsemi’s growth while cheaper Chinese wafers keep pressuring silicon carbide prices. If electric vehicle demand returns, onsemi will have less wafer capacity available to meet it, making pricing and supply decisions more important than the canceled construction itself.