ON Semiconductor Corp. and GlobalFoundries entered into an agreement in April for ON Semiconductor to acquire a 300mm fab located downstate in East Fishkill.
Officials said the total consideration for the acquisition is $430 million, of which $100 million has been paid at signing of the definitive agreement, and $330 million will be paid at the end of 2022, after which ON Semiconductor will gain full operational control of the fab, and the site’s employees will transition to ON Semiconductor.
Completion of the transaction is subject to regulatory approval and other customary closing conditions.
“This is the right deal at the right time for the right reasons, and it promises significant long-term economic impact in Saratoga County and beyond,” said Saratoga County Prosperity Partnership President Marty Vanags. “GlobalFoundries accelerates its path to profitability under the strong leadership of CEO Tom Caulfield. Saratoga County benefits from additional high-tech jobs and increased business at GlobalFoundries Fab 8 in Malta.
“New York state grows its semiconductor ecosystem, employee base and capital investment with the addition of a world-class company in ON Semiconductor,” he said. “This announcement further illustrates a thriving semiconductor industry in Saratoga County and New York that is well positioned for continued growth in today’s innovation-driven economy.”
The agreement allows ON Semiconductor to increase its 300mm production at the East Fishkill fab over several years, and allows for GlobalFoundries to transition its numerous technologies to the company’s three other at-scale 300mm sites, officials said. Under the terms of the agreement, GlobalFoundries will manufacture 300mm wafers for ON Semiconductor until the end of 2022. First production of 300mm wafers for ON Semiconductor is expected to start in 2020.
The agreement also includes a technology transfer and development agreement and a technology license agreement. This provides a world class, experienced 300mm manufacturing and development team to enable conversion of ON Semiconductor wafer processes from 200mm to 300mm. ON Semiconductor will also have immediate access to advanced CMOS capability including 45nm and 65nm technology nodes. These processes will form the basis 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.
