Quick Read
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Onsemi (ON) scrapped its planned Czech silicon carbide expansion after cheap Chinese wafers and weaker EV demand made building its own supply uneconomical.
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Cash is shifting to AI data center power, where revenue grew 175% last quarter but remains just $180 million versus $777 million from automotive.
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The test comes with fourth-quarter revenue guidance of $1.715 billion to $1.815 billion, and a miss or a big Rožnov charge undermines the thesis.
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Read More: Learn 7 ways to generate income with a $1,000,000+ portfolio (sponsor)
On Friday, November 6, 2026, onsemi( NASDAQ:ON ) and the Czech Ministry of Industry and Trade jointly confirmed they will not proceed with the planned silicon carbide expansion at the company's plant in Rožnov pod Radhoštěm. Silicon carbide is a material used to make power chips that handle high voltage efficiently, and electric vehicle drivetrains and chargers use a lot of it.
The stock closed at $63.20, up 0.30%, after the news came out late in the session. The bigger problem for shareholders is the decline that came before it. ON fell 23.27% over the past month during a broad chip selloff, and the close sits about 53% below the 52-week high of $134.92.
That leaves a company worth $24.65 billion with less capital tied up in electric vehicle chips and more of its future depending on AI data center power.
What Was Canceled and What Keeps Running
Onsemi dropped the plan with the ministry's agreement. It tied the decision to changes in the global silicon carbide market and in the project's economics since the original announcement, and it said the decision says nothing about the Czech investment climate.
Only the expansion is canceled. 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."
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Neither side disclosed a write-down, a charge, or any terms for returning state aid. The most recent onsemi 8-K is dated November 2, 2026, so none of these costs have been filed yet.
How a $2 Billion Plan Came Apart
In 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.
The European Commission later approved €450 million ($518 million) in Czech aid against a planned onsemi spending of €1.64 billion. That figure was well below the "up to" announced number.
Czech press reported in June 2026 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 came onto the market. The company did not comment at the time. On August 3, 2026, Havlíček said the conditions attached to the aid were no longer being met.
Why Owning Wafer Supply Stopped Paying
The 2024 plan assumed strong electric vehicle demand. Demand came in lower than that, and cheap Chinese wafers pushed prices down, so buying wafers now costs less than building a factory to make them.
The cash is going to AI data center power instead. Third-quarter revenue was $1.722 billion, up 11%, and AI data center revenue grew 175% year over year. Onsemi agreed to buy Ferric for $600 million plus up to $175 million in milestone payments and raised its 2030 AI data center goal to more than $3 billion. That figure is a target that onsemi has yet to reach. The power and cooling suppliers behind the AI expansion are a category we covered in a free report on seven AI infrastructure names that are not chipmakers.
The new business is still small. Third-quarter AI data center revenue was $180 million, compared with $777 million from automotive. If electric vehicle demand recovers, onsemi will have less wafer capacity to meet it.
What Could Change the Outlook for Onsemi After Rožnov
The project had stopped making economic sense, and dropping it brings down capital spending at a time when quarterly free cash flow reached $488.6 million.
Fourth-quarter revenue guidance of $1.715 billion to $1.815 billion is the test. If onsemi reports revenue below that range, or files an 8-K showing a large Rožnov charge or aid repayment, this view is wrong.
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