Fujitsu Semiconductor Limited and ON Semiconductor (Nasdaq: ON) today announced an agreement that ON Semiconductor will purchase a 30 percent incremental share of Fujitsu’s 8-inch wafer fab in Aizu-Wakamatsu, resulting in 40 percent ownership when the purchase is completed. The purchase is scheduled to be completed on April 1, 2018, subject to certain regulatory approvals and other closing conditions.
The two companies entered into an agreement in 2014, under which ON Semiconductor obtained a 10 percent ownership interest in Fujitsu’s Aizu 8-inch fab. Initial transfers began in 2014, and successful production and ramp-up of wafers began in June 2015. ON Semiconductor continues to increase demand at the Aizu 8-inch fab, and both companies determined that further strategic partnership will maximize the value both companies provide.
ON Semiconductor plans to increase ownership to 60 percent by the second half of 2018 and to 100 percent in the first half of 2020, allowing ON Semiconductor to add capacity to their global footprint. This additional capacity will allow ON Semiconductor to continue scaling its business based on demand and enable increased supply chain flexibility.
“We believe that transforming into a globally competitive company is the key for the continuous growth of the Aizu 8-inch fab. Furthering our strategic partnership with ON Semiconductor, who provides a broad product portfolio, will enable the Aizu 8-inch fab to secure future growth,” said Kagemasa Magaribuchi, president of Fujitsu Semiconductor Limited. “We believe that the growth of the Aizu 8-inch fab will contribute to maintaining and expanding a strong workforce and assist with the development of the regions.”
“We have had a strong and successful partnership with Fujitsu since announcing our investment in 2014,” said Keith Jackson, president and CEO of ON Semiconductor. “We believe furthering our partnership with Fujitsu Semiconductor will enable us to maintain our industry-leading manufacturing cost structure and also help us optimize our capital spending in coming years. This is a strategic investment for ON Semiconductor to secure additional manufacturing capacity, in support of our accelerated production needs and for revenue growth in coming years.”
Manufacturing is a core competency for ON Semiconductor, and approximately 75 percent of manufacturing operations are done internally through the company’s industry leading cost structure.