onsemi has announced definitive agreements to divest its manufacturing facilities in Tarlac, Philippines, and Mountain Top, Pennsylvania, as part of its ongoing Fab Right manufacturing strategy. The transactions are intended to optimize the company’s global manufacturing footprint, improve cost competitiveness, and support long-term gross margin expansion while maintaining supply continuity for customers.
The divestitures are part of onsemi’s broader Fab Right initiative, which focuses on aligning manufacturing resources with the company’s most competitive, scalable, and technology-focused operations.
By streamlining its manufacturing network, onsemi aims to:
- Improve manufacturing cost structure
- Expand gross margins
- Increase operational efficiency
- Better align production capacity with long-term strategic priorities
onsemi has signed an agreement to sell its Tarlac, Philippines manufacturing facility to Greatek Electronics Inc., a Taiwan-based provider of semiconductor packaging and testing services.
Key details include:
- Expected closing within three to six months
- Subject to customary regulatory approvals and closing conditions
- Facility will continue operating during the transition period
- Long-term supply agreement established to ensure uninterrupted customer supply after closing
The supply agreement is intended to maintain production continuity while leveraging Greatek’s packaging and test capabilities.
The company has also entered into an agreement to divest its Mountain Top, Pennsylvania facility to Silex Microsystems, a Sweden-based semiconductor manufacturer.
Unlike the Tarlac transaction, the Mountain Top sale will follow a longer transition timeline:
- Expected closing in January 2028
- Subject to customary approvals
- Extended transition supports gradual migration of manufacturing to other onsemi facilities
This phased approach is designed to enable an orderly transfer of products and technologies while minimizing disruption for customers.
onsemi expects the manufacturing footprint optimization to generate approximately:
- US$35 million in annual cost savings
- Initial savings beginning in 2027
- Full annual savings realized in 2028
The company views these savings as an important contribution toward improving long-term profitability and manufacturing efficiency.
Both transactions include measures to ensure uninterrupted customer supply throughout the transition periods.
These include:
- Continued operation of the affected facilities until production transfers are completed
- Long-term manufacturing and supply agreements where appropriate
- Planned migration of products to other qualified manufacturing sites within onsemi’s global network
Original – onsemi