Onsemi (ON Semiconductor) has agreed to sell two of its manufacturing facilities as part of a broader effort to reduce operating costs and improve gross profit margins, the chipmaker announced Tuesday.
The company expects sales to reach generating approx $35 million in annual cost savings.
Sales of production plants at different time periods
Onsemi plans to sell its Mountain Top production facility in Pennsylvania to Silex Microsystems. This deal is expected to be fully completed by January 2028. The companies explained that the long transition period is intended to allow sufficient time to transfer products made at the facility to other factories in the Onsemi network, and to ensure its supply to customers is uninterrupted.
The second facility, Onsemi’s Tarlac plant, will be purchased by Greatek Electronics, a Taiwanese semiconductor company. This transaction is billed to facilitate completion, in a shorter period of three to six months.
The companies said they will work closely throughout the transition period to maintain facility operations at a high level. Customer orders will also continue to be fulfilled without any hiccups throughout the delivery process.
Onsemi shares Rocky Patch after Synaptics deal
Onsemi shares fell 23% after an end From its $7 billion acquisition of all Synaptics shares, with investors reacting sharply to the deal by MSN described As a “monster sale”.
The sale of these production plants will remove the fixed costs of operating them from the company’s books, helping the company’s management increase its gross revenue margins after a period of weak demand in the chip and semiconductor market.
However, there is always a chance that the Company may turn over two of its production lines to outside companies, and a shift in such deals could interrupt customer supplies and further worsen the Company’s financial situation.
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