April 15, 2025 /SemiMedia/ — onsemi has halted its planned investment in a silicon carbide (SiC) power management IC production line in Bucheon, South Korea, as the company recalibrates its global strategy amid shifting demand in the electric vehicle (EV) market.

Sources familiar with the matter say most engineers from the Bucheon facility have been recalled to the U.S., leaving only a small number of R&D personnel, who are also expected to be reorganized. The decision reflects weakening demand for high-cost SiC-based solutions, particularly in the South Korean and Chinese EV markets, where automakers are now prioritizing affordable models using conventional silicon IGBT chips.

In 2022, onsemi had committed KRW 1.4 trillion (approx. $1 billion) to expand the Bucheon fab with a new S5 production line, expected to contribute up to 40% of its global SiC output. At the time, CEO Hassane El-Khoury touted the site's strategic importance for onsemi’s growth in EV power applications.

However, the company revealed in its Q1 2024 earnings call that SiC revenue has become volatile due to a sharp decline in Chinese EV demand. Meanwhile, Korean automakers Hyundai and Kia posted year-on-year EV sales drops of 19% and 18% respectively in 2023, dampening local market prospects.

With Korean-made SiC struggling to remain cost-competitive against Chinese alternatives, onsemi appears to have overestimated growth in Korea's EV segment. The rise of low-cost EVs like Hyundai’s Casper EV and Kia’s EV4—which use cheaper silicon IGBT power solutions—has further reduced demand for premium SiC devices.

onsemi is now shifting its focus to Europe, where it plans to invest KRW 2.7 trillion in a new SiC facility in the Czech Republic. The plant, expected to go online in 2027, will have three times the capacity originally planned for Bucheon, highlighting the company’s pivot toward optimizing cost structure and regional production resilience.

As the power semiconductor industry adapts to evolving EV architectures and regional demand trends, onsemi’s strategic moves reflect a broader reassessment of technology paths and global supply chain alignment.