:ON Semiconductor Corp is considering investing $2 billion in boosting production of silicon carbide chips that are widely used to help extend the range of electric vehicles, company executives said on Tuesday.
Chief Financial Officer Thad Trent said during an analyst presentation the company is considering the expansion in either the U.S., the Czech Republic or Korea.
ON Semiconductor is a longtime supplier to the automotive industry, supplying both chips that go into drive trains of electric cars as well as a broad swath of other chips like cameras and sensors that help with driver-assistance systems.
The company makes more than half of its own chips internally and has invested in a full supply chain for energy efficient silicon carbide chips, making both the raw materials and finished chips in-house.
Trent said that increased silicon carbide production would happen at one of the company's existing sites, rather building a new factory, to save costs.
"The three locations we're looking at are where we have infrastructure already," Trent said during a question and answer session after the presentation.
At a financial analyst day on Thursday, executives said they aim to capture 40 per cent of the silicon carbide automotive chip market by 2027.
The company forecast that growth in that area and other will help it expand revenues at a 10 per cent to 12 per cent compound annual growth rate, expanding sales from $8.3 billion in 2022 to an estimate with a midpoint of $13.9 billion by 2027.
Over the same time period, ON Semiconductor expects to expand free cash flows from $1.6 billion in 2022 to $3.5 billion to $4 billion by 2027.