Onsemi is stepping up its factory overhaul, moving to sell two chip plants as it pushes harder toward a leaner manufacturing footprint aimed at cutting costs and boosting profit margins. The latest moves slot cleanly into its Fab Right strategy, which concentrates production in the company’s most competitive, scalable lines in power and sensing semiconductors for automotive and industrial customers.markets.
Onsemi doubles down on Fab Right
Fab Right is essentially Onsemi’s strategy for a lighter, more profitable manufacturing base.
Instead of maintaining a broad mix of older, less efficient facilities, the company is gradually shifting output into a smaller set of higher utilization fabs, using asset sales to strip out fixed costs and redeploy capital into growth areas such as intelligent power devices and image sensors.investor.
Two plants sold to specialist partners
Under the newly announced agreements, Onsemi will sell its facility in Tarlac in the Philippines to Greatek Electronics, a Taiwanese packaging and test specialist. The company’s Mountain Top plant in Pennsylvania will go to Silex Microsystems of Sweden, a microelectromechanical systems player that gains a US manufacturing base for MEMS and related products through the deal.
Closing timelines and transition windows
The Tarlac sale is slated to close in roughly three to six months, giving Onsemi and Greatek a relatively tight transition window to keep lines running while customer commitments are handed over. The Mountain Top transaction has a longer glide path, with closing targeted for January 2028, which allows Onsemi to gradually move products and processes from that site into other fabs in its network without disrupting supply.
Cost savings and margin ambitions
Taken together, the two divestitures are expected to deliver about 35 million dollars in annual cost savings once fully implemented. Initial benefits are projected to start showing up in 2027, with the full run rate in 2028, feeding directly into Onsemi’s broader push to expand gross margins under the Fab Right program.
Assuring customers and continuity
Onsemi has stressed that both plants will keep operating during their respective transition periods, and it has agreed a long term supply arrangement with Greatek to ensure customer deliveries remain stable as ownership of the Tarlac facility changes.
For Mountain Top, the extended closing timeline is designed to allow an orderly migration of technologies and products into other Onsemi fabs while maintaining continuity for automotive and industrial clients that rely on those lines.
Part of a longer fab light journey
This latest pair of two chip plant sales continues a multi year journey that began with what Onsemi called its fab lite strategy, including earlier divestitures of wafer fabs in South Portland in Maine and Oudenaarde in Belgium.
In those transactions, buyers such as Diodes and BelGaN aimed to expand analog and gallium nitride capacity, while the company focused on consolidating its own output into fewer, more efficient manufacturing hubs and chopping-off hundreds of millions of dollars in fixed costs over time.
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