The deal is worth $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.
The agreement will allow 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.
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 analogue 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 analogue products, enables incremental manufacturing efficiencies, and accelerates progress towards our target financial model.”
"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 optimise 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.”