onsemi Divests Two Manufacturing Sites, Expected to Save ~$35M Annually
Alina Collins
onsemi signed two definitive agreements to sell factories in the Philippines and the U.S., expecting ~$35 million in annual savings — but the payoff won't start until 2027, and the transition-period margin drag is what the market is watching.
Who is buying these two plants?
The Tarlac, Philippines plant goes to Taiwan-based Greatek Electronics; closing is expected within three to six months.
The Mountain Top, Pennsylvania plant goes to Silex Microsystems, subject to regulatory approval, with closing expected by January 2028.
Both deals fall under onsemi's "Fab Right" strategy — keep only the most efficient fabs, divest the rest.
When do the savings actually show up?
Combined, the two deals are projected to save ~$35 million per year in manufacturing costs.
Initial savings begin in 2027; full run-rate savings land in 2028.
This means → there is a gap of roughly two years where onsemi spends on restructuring before the savings materialize on the income statement.
Will customer orders be disrupted?
Alongside the Philippines deal, onsemi and Greatek signed a long-term supply agreement.
In plain terms = the factory changes hands, but existing orders keep running on the same lines — customers should see no interruption.
The U.S. deal still awaits regulatory clearance, with a later closing date; transition details have not been disclosed.
Why did the stock drop on the news?
onsemi shares fell 2.4% in pre-market trading after the announcement.
This reflects a market concern not about *whether* to divest, but about whether the transition-period margin dilution can be fully offset by gross-margin improvement.
Put simply = saving money is good, but it arrives two to three years out — right now, the market has to digest one-time costs and capacity adjustments from the sales.
Content is for reference only, not financial advice.