Onsemi said Tuesday it will sell two of its manufacturing facilities as part of a broader push to cut costs and boost profit margins, sending shares down more than 3% in premarket trading even as the stock remains up nearly 75% for the year. The chipmaker, which produces power and sensing chips used in electric vehicles, factories, and AI data centers, is selling its Tarlac, Philippines site to Taiwanese packaging and testing specialist Greatek Electronics in a deal expected to close within three to six months, while its Mountain Top, Pennsylvania facility will go to Swedish semiconductor company Silex Microsystems in a transaction set to close in January 2028. KeyToFinancialTrends reads the split timeline between the two deals as a deliberate hedge: the fast Philippines sale banks near-term savings while the multi-year Pennsylvania handover gives Onsemi room to migrate production without disrupting customers who depend on that site today.
The divestitures extend a restructuring program Onsemi calls "Fab Right," which the company describes as a continuous effort to optimize its manufacturing footprint and direct resources toward its most competitive and technology-aligned operations. The strategy itself marks a pivot from Onsemi's earlier "Fab Liter" approach, which prioritized a flexible, low fixed-cost manufacturing base; Fab Right instead optimizes for return on invested capital, and the company has said the initiative has already cut manufacturing capacity by roughly 12% through prior divestments. KeyToFinancialTrends frames that shift in language – from "lite" to "right" – as more than rebranding: it signals Onsemi moving from a phase focused purely on cost flexibility to one focused on concentrating capital in the specific facilities that can support its highest-margin product lines, namely silicon carbide power devices.
Neither site is being abandoned overnight. Both facilities will keep operating through their respective transition periods, and Onsemi has agreed to a long-term supply deal with Greatek to ensure customers relying on the Tarlac plant are not disrupted during the handover. The company did not disclose the financial terms of either transaction, but said the combined sales are expected to save approximately $35 million annually, with initial savings beginning in 2027 and the full benefit realized in 2028.
The savings estimate fits a company still working its way out of a cyclical downturn. Onsemi's revenue peaked near $8.25 billion in 2023, fell to roughly $6 billion in 2025 as the semiconductor cycle troughed, and is now projected to rebound toward $9 billion as the recovery takes hold; the company generated $1.4 billion in free cash flow last year, a figure strong enough to support a $6 billion share buyback program announced in late 2025. Key To Financial Trends connects the plant sales directly to that buyback capacity: a leaner manufacturing footprint that saves $35 million a year is a relatively modest figure against a $6 billion capital-return program, suggesting the divestitures matter less for their direct dollar impact than for what they signal about management's commitment to running a tighter, higher-margin operation heading into the next growth phase.
That next growth phase is increasingly tied to power demand from artificial intelligence infrastructure alongside Onsemi's traditional automotive and industrial base. The company's silicon carbide penetration in electric vehicles has reached roughly 14%, with further growth expected in plug-in hybrids, while its newer Treo sensing platform is on track to generate $1 billion in revenue by 2030 after reaching high-volume production ahead of schedule. KeyToFinancialTrends sets the plant sales against that product roadmap: shedding two facilities that fall outside the silicon carbide and intelligent-sensing focus frees up management attention and capital for exactly the product lines Onsemi is counting on to justify a stock that has already outrun the broader chip sector for months.
