The company disclosed the sale plan alongside the announcement of reduced net profit and revenue in its 4Q19 financial results.
The Oudenaarde facility is an automotive qualified facility which meets the IATF 16949: 2016 global industry standard for quality management. The company believes that the facility is an attractive semiconductor manufacturing asset for a number of reasons, including its highly skilled workforce with extensive experience managing a diverse array of technologies and its close proximity to the world’s leading automotive innovation and manufacturing hub. Currently, the 44.000 square meter facility supports the company’s low, medium and high voltage analog CMOS and BCD technologies.
Potential buyers could include automotive and industrial chip manufacturer Melexis Technologies NV (Tessenderlo, Belgium) or X-Fab Silicon Foundries SE (Erfurt, Germany), a maker of analog, mixed-signal and MEMS. In 2018 Melexis said it planned to spend €75 million (about $92 million) over the next five years to increase its manufacturing capabilities in Europe (see Melexis to grow manufacturing in Europe).
An alternative could be bid from a Chinese company. In 2016 leading Chinese foundry Semiconductor Manufacturing International Corp. acquired the wafer fab at Avezzano, Italy originally built by Texas Instruments. SMIC sold the Avezzano fab on to Jiangsu CAS-IGBT Technology Co. Ltd., a Chinese chip maker focused on power devices, for $113 million in 2019 (see SMIC sells Italian wafer fab to Jiangsu).
In 2019 On Semi bought a 300mm wafer fab in East Fishkill, New York, from Globalfoundries Inc. for $$430 million. Moving such manufacturing as it can on to larger 300mm-diameter wafers could help increase its efficiency of manufacturing. Oudenaarde is thought to still manufacture on 6-inch diameter wafers.
As part of efforts to promote an orderly transition for all parties involved, On Semi said it would enter into a supply agreement under mutually agreeable terms.
On Semi acquired the Oudenaarde wafer fab in 2008 when it took over AMI Semiconductor. Oudenaarde was AMIs Fab2 and at that time was listed as running a 0.35-micron mixed-signal process on six-inch diameter wafers at a rate of 100,000 wafers per year. The fab was previously owned by Alcatel-Mietec making mixed-signal circuits for telecommunications.
On Semi reported fourth quarter net profit of $56.5 million on revenues of $1.4 billion. The profit was down from $165.6 million in the same quarter a year before and the revenue was down from $1.5 billion. CEO Keith Jackson said the company is outperforming peers “against a backdrop of challenging macroeconomic and geopolitical conditions.”
On Semi is forecasting revenue of between $1,355 million and $1,405 million in 1Q20.
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