Phoenix-based ON Semiconductor Corp. today announced that it is buying the 300mm chip fabrication plant in East Fishkill from Global Foundries for $430 million, of which $100 million has been paid at the signing of the definitive agreement, and the remaining $330 million will be paid at the end of 2022.
At that time, ON Semiconductor will gain full operational control of the plant, with Global Foundries’ 900-plus employees transitioning to ON Semiconductor. Completion of the transaction is subject to regulatory approval and other customary closing conditions.
In addition, ON Semiconductor has committed to invest more than $720 million over 10 years in the East Fishkill facility.
In exchange for ON Semiconductor’s investment commitments, Empire State Development has offered to provide up to $17.5 million in grants toward the purchase of the property, facilities and certain manufacturing equipment, according to Gov. Andrew Cuomo’s office. In addition, the state will provide $22.5 million in Excelsior Jobs Program tax credits related for investment, new hiring and research and development over 10 years. Award of both the grant and the Excelsior tax credits are contingent on ON Semiconductor meeting its job and investment commitments, according to the governor’s office.
“The company’s investment will further advance chip manufacturing in New York state and add over 100 jobs and retain nearly 1,000 in Dutchess County,” Lt. Gov. Kathy Hochul said.
The agreement allows ON Semiconductor to increase its 300mm production at the East Fishkill plant over several years, and allows for Global Foundries to transition its numerous technologies to the company’s three other at-scale 300mm sites, according to a statement. Under the terms of the agreement, Global Foundries will manufacture 300mm wafers for ON Semiconductor until the end of 2022. First production of 300mm wafers for ON Semiconductor is expected to start in 2020.
“The acquisition of the 300 mm East Fishkill fab is another major step in our progress towards leadership in power and analog semiconductors,” said Keith Jackson, president and chief executive officer of ON Semiconductor. “The acquisition adds additional capacity over the next few years to support growth in our power and analog products, enables incremental manufacturing efficiencies, and accelerates progress towards our target financial model.”
“We are excited to support ON Semiconductor’s expansion to the Mid-Hudson Region, which will keep high paying manufacturing jobs in New York state and support the company’s plan for future growth and development,” said Howard Zemsky, president and CEO at Empire State Development.
Global Foundries took over ownership of the East Fishkill plant four years ago from IBM.
National Resources bought 300 acres of the campus for its iPark brand and has added tenants such as Sloop Brewing Co. and handcrafted syrup-maker More Good.