Onsemi Sells Two Plants to Cut Costs

According to onsemi, the U.S.-based power semiconductor and image sensor manufacturer announced on July 7 that it plans to divest two manufacturing facilities in the United States and the Philippines as part of a broader effort to reduce operating costs and improve profitability.

The company said the planned divestitures support its “Fab Right” manufacturing strategy, which is designed to optimize the company’s global manufacturing footprint, enhance cost efficiency, and support sustainable gross margin expansion. The strategy focuses on allocating resources to the company’s most competitive, scalable, and technologically aligned manufacturing operations.

Philippines Tarlac facility

onsemi has entered into an agreement with Greatek Electronics, a Taiwan-based semiconductor company specializing in integrated circuit packaging and testing services. The transaction is expected to close within three to six months, subject to customary closing conditions and regulatory approvals.

During the transition period, the Tarlac facility will continue operating as part of onsemi’s manufacturing network. The two companies have also established a long-term supply agreement to support ongoing production and ensure continuity of customer commitments following the completion of the transaction.

Mountain Top facility in Pennsylvania

In a separate agreement, onsemi has reached a deal with Silex Microsystems, a Sweden-based semiconductor company, regarding the sale of its Mountain Top facility in Pennsylvania. This transaction is expected to close in January 2028, subject to customary closing conditions and regulatory approvals.

The extended transition period will allow onsemi to systematically transfer the products currently manufactured at the Mountain Top facility to other facilities within its manufacturing network. The company said this approach is intended to ensure uninterrupted customer support and facilitate an orderly transfer of technical capabilities.

Expected cost savings and strategic impact

onsemi expects the divestiture initiatives to generate approximately $35 million in annual cost savings. Initial savings are anticipated to begin in 2027, with full annualized savings expected by 2028.

The company stated that the actions represent a significant step toward building a more focused and efficient manufacturing network. By realigning its manufacturing footprint with long-term strategic priorities, onsemi aims to strengthen its ability to deliver sustained value to customers and stakeholders in the semiconductor and electronic components markets.