onsemi's Divestitures Strengthen Fab Right Strategy: Here's How - TradingView

ON Semiconductor (onsemi) recently announced the divestiture of its manufacturing facilities in Tarlac, Philippines, and Mountain Top, Pennsylvania, to Greatek Electronics and Silex Microsystems, resp... Read original →

onsemi’s divestitures aren’t mere cost-cutting—they’re surgical execution of its Fab Right strategy. Technically, reallocating capacity to 300mm SiC and GaN platforms sharpens its edge in AI data center power delivery and EV traction inverters, pressuring upstream equipment vendors to accelerate wide-bandgap process integration. Geopolitically, shifting assets to Greatek (Taiwan, China) and Silex (Sweden) diversifies risk but introduces complex export control exposure across U.S., EU, and Chinese regulatory regimes. Against TI’s IDM 2.0 cost dominance and Navitas’ consumer GaN incursions, onsemi is doubling down on high-margin automotive and industrial segments, using manufacturing discipline as a moat. Over the next 18 months, $35M annual savings—combined with surging AI server power demand—could push gross margins beyond 40%. However, reliance on a constrained SiC substrate supply chain dominated by Wolfspeed may cap long-term upside.