ON Semiconductor Corp. is exploring a $2 billion investment to increase production of silicon carbide chips, which are extensively used to help expand the range of electric vehicles, according to company executives on Tuesday.

During an analyst presentation, firm leaders stated that the company is exploring expanding in the United States, the Czech Republic, or Korea. Each of those countries already has a factory run by the company.

ON Semiconductor has long been a supplier to the automotive sector, producing both chips that go into electric car drive trains as well as a wide range of additional chips like as cameras and sensors that aid in driver-assistance systems.

The company manufactures more than 50% of its own chips and has invested in a whole supply chain for energy efficient silicon carbide chips, manufacturing both raw materials and finished chips in-house.

ON Semiconductor Chief Executive Hassane El-Khoury stated in an interview that the company's silicon carbide chip production is now centred on one of its sites in Bucheon, South Korea. The company intends to find "end-to-end" production, which means that any location it selects will convert raw silicon carbide powder into a chip.

El-Khoury stated that reproducing the complete production process in more than one location has become a significant selling point to automakers who are still wary of 2021, when a freeze in chip-heavy Texas and a shortage from Asian chip suppliers caused vehicle production lines to stop down.

"It's always a good thing to have a geographically distributed supply chain," El-Khoury says.

During a financial analyst day on Thursday, executives stated their goal of capturing 40% of the silicon carbide automotive chip market by 2027.