onsemi Divests Niigata, Japan Fab

Rhea-AI Summary

onsemi has finalized the sale of its Niigata, Japan facility to JS Foundry K.K., aligning with its fab-liter strategy to enhance gross margins and decrease fixed costs. This divestiture aims to streamline operations and improve financial predictability. JS Foundry K.K. will continue wafer fabrication at the site under a supply agreement with onsemi, ensuring customer supply continuity. The leadership expressed confidence in the future of the Niigata site under JS Foundry's management, acknowledging the dedication of its employees during the transition.

Positive

• Successful sale of Niigata facility to JS Foundry K.K. enhances operational focus.
• Continued wafer supply agreement ensures customer relationships are maintained.

Negative

• None.

Company continues to execute on its fab-liter strategy; closed sale of Japan fab

PHOENIX--(BUSINESS WIRE)-- onsemi (Nasdaq: ON), a leader in intelligent power and sensing technologies, today announced the completion of the sale of its Niigata, Japan facility to JS Foundry K.K. The divestiture aligns with onsemi’s fab-liter strategy to expand gross margin and improve predictably of its financial results by reducing fixed cost footprint.

JS Foundry K.K. was founded through a partnership between Mercuria Investment Co., Ltd. (Mercuria) and Sangyo Sosei Advisory Corporation Inc. (SSA). Mercuria, a subsidiary of Mercuria Holdings Co., Ltd. (a listed company on the Prime Market of the Tokyo Stock Exchange) is one of the leaders in the Japanese alternative investment space and its investments cover different industries including manufacturing and service industries. SSA is the first financial advisor in Japan specializing in the technology, media and telecommunications (TMT) industry, with world-class financial advice and a network of cross-border transactions connecting domestic and international clients on a variety of transformational projects. Through their partnership, they established JS Foundry K.K. to be a Japanese-owned Foundry company to supply semiconductors to Japanese customers.

“After an in-depth search for a buyer for the last two years, we are confident to have found the right partner for the facility in JS Foundry K.K.,” said Hassane El-Khoury, president and chief executive officer of onsemi. “As always, when making decisions about our manufacturing structure and facilities across the globe, we consider the well-being of employees and seek to create a smooth transition for everyone involved. We look forward to a bright future for JS Foundry K.K. and Niigata employees, who we thank for their hard work and commitment to onsemi.”

JS Foundry K.K. is planning to use the site as the foundation for its new foundry business in Japan. To ensure continuity of supply to its existing customers, onsemi has entered into a wafer supply agreement with JS Foundry K.K. to continue existing wafer fabrication at the site.

About onsemi

onsemi (Nasdaq: ON) is driving disruptive innovations to help build a better future. With a focus on automotive and industrial end-markets, the company is accelerating change in megatrends such as vehicle electrification and safety, sustainable energy grids, industrial automation, and 5G and cloud infrastructure. onsemi offers a highly differentiated and innovative product portfolio, delivering intelligent power and sensing technologies that solve the world’s most complex challenges and leads the way to creating a safer, cleaner, and smarter world. onsemi is recognized as a Fortune 500^® company and included in the S&P 500^® index. Learn more about onsemi at www.onsemi.com.

onsemi and the onsemi logo are trademarks of Semiconductor Components Industries, LLC. All other brand and product names appearing in this document are registered trademarks or trademarks of their respective holders. Although the company references its website in this news release, such information on the website is not to be incorporated herein.

Cautions Regarding Forward-Looking Statements

Certain statements in this press release, including, among others, the expected closing of the transactions and the potential effects thereof, are “forward-looking statements”, as that term is defined in Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are often characterized by the use of words such as “believes,” “estimates,” “expects,” “projects,” “may,” “will,” “intends,” “plans,” “should,” or “anticipates,” and similar expressions. All forward-looking statements in this press release are made based on onsemi’s current expectations, forecasts, estimates and assumptions, and involve risks, uncertainties and other factors that could cause results or events to differ materially from those expressed in the forward-looking statements. Additional factors that could cause results to differ materially from those projected in the forward-looking statements are contained in onsemi’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other of onsemi’s filings with the SEC, respectively. onsemi assumes no obligation to update such information, except as may be required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20221201005461/en/

Stefanie Cuene

Head of Public Relations

onsemi

+1 (602)-315-3708

stefanie.cuene@onsemi.com

Parag Agarwal

Vice President - Investor Relations & Corporate Development

onsemi

+1 (602)-244-3437

investor@onsemi.com

Source: onsemi

FAQ

What is the recent sale by onsemi related to?

onsemi recently sold its Niigata, Japan facility to JS Foundry K.K. as part of its fab-liter strategy.

How does the sale of the Niigata facility impact onsemi's finances?

The sale is expected to improve onsemi's gross margins and reduce fixed costs, enhancing financial predictability.

What will JS Foundry K.K. do with the Niigata facility?

JS Foundry K.K. plans to use the Niigata site as the foundation for its new foundry business in Japan.

Is there a supply agreement following onsemi's sale of the Niigata facility?

Yes, onsemi has entered into a wafer supply agreement with JS Foundry K.K. to continue existing wafer fabrication.