GlobalFoundries and ON Semiconductor on Monday signed a definitive agreement for the latter to buy GlobalFoundries’ 300-mm fab in East Fishkill, New York. In addition to the production facility, ON Semiconductor will get a team of experienced engineers from GlobalFoundries as well as a technology transfer, development, and license agreements.

The total consideration for the Fab 10 takeover is $430 million. GlobalFoundries received $100 million today upon the signing of the agreement, whereas $330 million will be paid at the end of 2022 when ON Semiconductor will gain full operational control of the fab. Employees of the facility will also join ON Semiconductor. Meanwhile, ON will start using the fab’s services in 2020. Such a long transition period is not unusual for the industry, as in this case it will allow GlobalFoundries to finish filling orders from its current customers.

GlobalFoundries first received Fab 10 as part of its acquisition of IBM's microelectronics assets in 2015. The fab is used to process 300-mm wafers using various technologies, including 45nm and 65 nm technology nodes (as well as their 40 nm and 55 nm versions). Under the terms of the agreement, these technologies will be licensed to ON Semiconductor and will be the basis for the latter’s upcoming process technologies.

At present ON Semiconductor uses fabs that process 200-mm wafers, so the engineers from GlobalFoundries will help the company to transit it process technologies from 200-mm to 300-mm wafers.

Overall this is the latest move by GlobalFoundries to slim down the company as it pivots towards producing with more specialized process nodes. After Thomas Caulfield became CEO of GlobalFoundries last March, the company ceased development of bleeding-edge manufacturing technologies. Then the company started to consolidate its production capacities, selling one of its 200-mm fabs in Singapore (Fab 3E) to Vanguard as part of exiting MEMS business.

For its Fab 3E as well as Fab 10, GlobalFoundries will get $666 million in total (with $336 million in 2019). The company will use the proceedings to fund its specialized production technologies.

"ON Semiconductor is an ideal partner for GlobalFoundries and this agreement is a transformative step in our journey to build GlobalFoundries into the world's leading specialty foundry,” said Tom Caulfield, CEO at GlobalFoundries. “This partnership enables GlobalFoundries to further optimize our assets globally and intensify our investments in the differentiated technologies that fuel our growth while securing a long-term future for the Fab 10 facility and our employees.”

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Source: GlobalFoundries

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  • Kevin G - Monday, April 22, 2019 - link

    Interesting. I wonder how this would impact that facility's 'Trusted Foundry' status as a place where chips used in secret government projects are manufactured. Think of processors used in missile guidance systems. Reply
  • jeremyshaw - Monday, April 22, 2019 - link

    IIRC, ON Semi is US based and has acquired US DOD suppliers before. Reply
  • Yojimbo - Tuesday, April 23, 2019 - link

    It's a reasonable question, but it took me less than a minute to go to ON's website to find:

    "Trusted Source

    With headquarters in Phoenix, Arizona, and on-shore design and manufacturing centers, ON Semiconductor offers a secure, stable environment for the development of advanced semiconductor solutions for military and aerospace applications. ON Semiconductor has been granted Category 1A Trusted Foundry and Trusted Design accreditation for its on-shore fabrication facilities in Idaho and Oregon; and has also been granted ‘Broker’ accreditation with Defense Microelectronics Activity (DMEA). This enables ON Semiconductor to support the entire Trusted flow from initial ASIC design through wafer fabrication, utilizing other trusted suppliers for packaging and test. The combination of the three accreditations benefits military and defense customers by providing a fully integrated trusted manufacturing solution.

    In addition, ON Semiconductor maintains ITAR certification and QML flows required for military designs."

    So, I don't see a reason for revocation of the certificate. Perhaps interestingly, GlobalFoundries is parented by the Mubadala Investment Company, an Abu Dhabi state-owned holding company. I wonder how well governments can handle such security and secrecy concerns with the way multinational corporations operate these days. On the other hand, there was plenty of technology stolen 60+ years ago when there wasn't much economic exchange at all between the US and the USSR.
    Reply
  • Gondalf - Tuesday, April 23, 2019 - link

    Yes you are right and likely they will diverge fron GloFo strategy developing or licensing finer processes for Military needs. After all ON semi is an intersting $ 6B/year thing in revenue, with the help of USA administration it can go below 14nm licensing from Samsung or developing in house with the help of ex IBM staff. Reply
  • Samus - Tuesday, April 23, 2019 - link

    It helps that they are US based and manufacture in the USA. This is exactly why Intel is in such a great strategic position to be a military contractor, especially for modems and radio equipment, because Qualcomm, although based in what, San Diego (home of two of the largest military bases in the country - and home of the two largest military contractors) still manufactures the vast majority of their products overseas... Reply
  • levizx - Wednesday, April 24, 2019 - link

    That's a laughable claim, considering to date, the ONLY modem (possibly) manufactured in the US is XMM 7560. All previous generations are manufactured by TSMC. Reply
  • Yojimbo - Wednesday, April 24, 2019 - link

    Wait, let me get out my smartphone, I'm gonna call in an artillery barrage. Reply
  • dromoxen - Tuesday, April 23, 2019 - link

    I think the bigger worry is China not USSR. China is state backed espionage, USSR is just sophisticated gangsters. Reply
  • deepblue08 - Tuesday, April 23, 2019 - link

    Soviet Union? I thought you guys broke up? Reply
  • FunBunny2 - Tuesday, April 23, 2019 - link

    "gangsters"

    yeah but run by the capo de tutti capo in the Kremlin.
    Reply

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