onsemi's Divestitures Strengthen Fab Right Strategy: Here's How - Yahoo Finance

ON Semiconductor (onsemi) recently announced the divestiture of its manufacturing facilities in Tarlac, Philippines, and Mountain Top, Pennsylvania, to Greatek Electronics and Silex Microsystems, resp... Read original →

onsemi’s divestiture of its Tarlac and Mountain Top fabs isn't cost-cutting—it's surgical realignment. By offloading legacy 8-inch capacity to Greatek (Taiwan, China) and Silex (Sweden), it funnels capital into SiC, GaN, and intelligent sensing—technologies critical for AI data centers and EVs. This move pressures upstream toolmakers to pivot toward compound semiconductors while securing downstream power IC supply amid surging server demand. Geopolitically, the split mitigates concentration risk but exposes onsemi to tightening U.S. CHIPS Act rules that may inflate future domestic expansion costs. Competitors like Infineon and STMicroelectronics will likely accelerate in-house SiC ramp-ups to capture automotive share. Over the next 18 months, expect more IDMs to adopt this hybrid model: asset-light yet process-controlled—especially as AI infrastructure drives >40% annual growth in high-efficiency power solutions.