ON Semiconductor to Acquire GlobalFoundries’ 300mm Fab

April 22, 2019 by Scott McMahan

ON Semiconductor Corporation and GlobalFoundries have agreed for ON Semiconductor to acquire GlobalFoundries' 300mm fab located in East Fishkill, New York. The total price for the acquisition is $430 million, of which $100 million was paid at signing of the definitive agreement, and the remaining $330 million will be paid at the end of 2022. After the full consideration has been paid, ON Semiconductor will get full operational control of the fab.

Also, the site's employees will transition to working for ON Semiconductor. Completion of the facility acquisition is subject to regulatory approval and other customary closing conditions.

The agreement enables ON Semiconductor to increase its 300mm production at the East Fishkill fab over several years. Global Foundries intends to gradually shift the 300mm production of its numerous technologies to the company's three other at-scale 300mm sites.

Under the terms of the agreement, Global Foundries will produce 300mm wafers for ON Semiconductor until the end of 2022.

ON Semiconductor expected to commence first 300mm fabrication at the facility in 2020.

The agreement also covers a technology transfer and development agreement and a technology license agreement. In addition to the facility and the technology, the agreement gives ON Semiconductor an experienced 300mm production and development team to enable conversion of ON Semiconductor wafer processes from 200mm to 300mm.

ON Semiconductor will also gain immediate access to advanced CMOS capability including 45nm and 65nm technology nodes. These processes will form the foundation for future technology development at ON Semiconductor.

"We are pleased to welcome the GlobalFoundries Fab10 team to ON Semiconductor's team. The acquisition of 300 mm East Fishkill fab is another major step in our progress towards leadership in power and analog semiconductors," said Keith Jackson, president and chief executive officer of ON Semiconductor. "The acquisition adds additional capacity over the next few years to support growth in our power and analog products, enables incremental manufacturing efficiencies, and accelerates progress towards our target financial model. I am very excited about the opportunity this acquisition creates for customers, shareholders, and employees of the two companies and look forward to a successful partnership with GlobalFoundries in the coming years."

"ON Semiconductor is an ideal partner for GlobalFoundries and this agreement is a transformative step in our journey to build GlobalFoundries into the world's leading specialty foundry," said Tom Caulfield, CEO at GlobalFoundries. "This partnership enables GlobalFoundries to further optimize our assets globally and intensify our investments in the differentiated technologies that fuel our growth while securing a long-term future for the Fab 10 facility and our employees."

"We are excited to support ON Semiconductor's expansion to the Mid-Hudson Region, which will keep high paying manufacturing jobs in New York State and support the company's plan for future growth and development," said Howard Zemsky, president and CEO at Empire State Development.