onsemi's Divestitures Strengthen Fab Right Strategy: Here's How - Yahoo Finance Singapore

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

onsemi’s divestitures mark a strategic recalibration of global power semiconductor manufacturing under its Fab Right doctrine. Technologically, this accelerates the shift of SiC and GaN devices to 8-inch+ platforms, pushing IDMs toward a hybrid model: core processes in-house, legacy nodes outsourced—forcing equipment vendors to meet tighter yield controls. Geopolitically, while offloading to Greatek (Taiwan, China) and Silex (Sweden) diversifies risk, tightening U.S.-China tech restrictions may inflate cross-border IP licensing costs. Competitors like Infineon and STMicroelectronics are likely to rationalize aging 8-inch fabs next, doubling down on automotive-grade SiC. Over the next 12–24 months, the industry will see a long-tail effect: high-margin products internalized, low-value capacity purged. onsemi is positioned to breach 40% gross margin—contingent on flawless supply-chain transition—leveraging surging demand from AI server power and intelligent sensing.