On Semi Almost Ready to Close Global Foundries Fab Deal
Way back in April of 2019 On Semiconductor (ON) agreed to purchase the Global Foundries (GFS[1]) Fab 10, a fab GF purchased from IBM (IBM) less than four years earlier. While $100m of the $430m was paid upfront, the balance due will be paid when the deal officially closes at the end of this year. As ON did not acquire full ownership back in 2019, the two companies reached an agreement where the GF foundry would supply wafer production to ON starting in 2020, while ON was granted rights to GF’s 300mm wafer technology. When the deal closes ON will produce 300mm wafers for GF through 2025. As part of the deal Empire State Development provided grants of $17.5m and $22.5m in tax credits toward the purchase that have been and will be paid out over 10 years.
On Semi has offered jobs to what we expect is the 950+ workers directly involved with Fab 10 according to NYS notices, and Global Foundries is expected to offer the remaining ~150 employees employment at the company’s Fab 8 located in Malta, NY. On Semi has also committed to spending ~$720m over that same 10 year period to enhance the site and hire additional personnel from the region. While those directly involved in the fab will see little change other than a new name on their paychecks, the GF fab in Malta is ~2 ¼ hours away and would be quite a haul for those that have to make that hike every day.
[1] Global Foundries was formed as part of the AMD divestiture in 2009 and received $1.5b to take over the IBM fabs in Fishkill (Fab 10) and Essex Junction, Vermont (Fab 9). GF was owned by the Sovereign Wealth Fund of Abu Dhabi until 2021.
On Semi has offered jobs to what we expect is the 950+ workers directly involved with Fab 10 according to NYS notices, and Global Foundries is expected to offer the remaining ~150 employees employment at the company’s Fab 8 located in Malta, NY. On Semi has also committed to spending ~$720m over that same 10 year period to enhance the site and hire additional personnel from the region. While those directly involved in the fab will see little change other than a new name on their paychecks, the GF fab in Malta is ~2 ¼ hours away and would be quite a haul for those that have to make that hike every day.
[1] Global Foundries was formed as part of the AMD divestiture in 2009 and received $1.5b to take over the IBM fabs in Fishkill (Fab 10) and Essex Junction, Vermont (Fab 9). GF was owned by the Sovereign Wealth Fund of Abu Dhabi until 2021.
Global Foundries - Fab 10 - East Fishkill, NY - Source: Globest.com
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