ON Semi Acquiring GF Fab Deemed a Win-Win

By Nitin Dahad, EETimes
May 3, 2019

Earlier this week, ON Semiconductor (ON Semi) announced it was buying the GlobalFoundries ex-IBM fab in a $430 million deal that will transition the fab to new ownership over the next three years.

The news comes as no surprise to many in the industry. Though a significant player, GlobalFoundries (GF), did not have the resources to compete with market leader TSMC. In any case, this has been part of a calculated strategy, as Rick Merritt highlighted in his report on the acquisition.

Malcolm Penn, chairman and CEO of market research firm Future Horizons, told EE Times the challenge for GF was that it never really was able to achieve the economies of scale to compete with number one. And for ON Semi, the company has “gone full circle back to the IBM model,” expanding its manufacturing base and improving its offer across the entire value chain, from design to manufacturing.

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