GlobalFoundries sells factory to ON Semiconductor for $430 million

GlobalFoundries sells one of its chip factories to ON Semiconductor. It’s Fab 10 in East Fishkill, New York. The acquisition is worth $430 million. The factory works with 300mm wafers on 45nm and 65nm nodes.

With the acquisition, ON Semiconductor will acquire not only the manufacturing facility, but also a team of employees and technology licenses. The companies closed the acquisition on Monday and GlobalFoundries immediately received 100 million dollars. The remaining $330 million will be transferred by the end of 2022. By then ON Semiconductor will have full operational control of the fab. In the meantime, the new owner will already be using the fab for his chips. That will start from 2020. However, GlobalFoundries can still use the factory until 2022 to meet obligations to existing customers.

The factory works with 45nm and 65nm nodes. ON Semiconductor will use these processes as the basis for new developments. Until now ON Semiconductor has been working with fabs that produce on 200mm wafers. Now that it gets its hands on a 300mm facility, it will be able to produce chips on a larger scale.

The sale of the facility by GlobalFoundries follows last year’s news that the company will stop developing advanced nodes such as 7nm, 5nm and 3nm. The chip manufacturer decided to focus on existing 12nm and 14nm designs and perfect them further. GlobalFoundries is a spin-off of AMD and was unable to compete with much larger competitors such as Samsung and TSMC in developing smaller nodes.

At the beginning of this year, GlobalFoundries already sold another facility: Fab 3E in Singapore. That is a facility that works with 200 mm wafers and that factory changed hands for 236 million dollars. After the sale of the two factories, GlobalFoundries still owns eight fabs worldwide.

ON Semiconductor is an American chip manufacturer that can make various types of chips on behalf of customers, such as asics, memory and cmos sensors. In 2018, the company had revenues of approximately $5.9 billion.