After having initially announced in late 2015 that it would acquire Fairchild Semiconductor, ON Semiconductor has officially completed its $2.4 billion cash acquisition of the San Jose, CA, USA-based company.
Founded in 1957, Fairchild Semiconductor is based in San Jose, CA, USA that develops such products as analog and mixed signal integrated circuits, automotive products, lighting integrated circuit, optoelectronics, and sensors for such markets as automotive, industrial automation, lighting, consumer goods, and wearable devices.
"The acquisition of Fairchild is a transformative step in our quest to become the premier supplier of power management and analog semiconductor solutions for a wide range of applications and end-markets," said Keith Jackson, president and CEO of ON Semiconductor. "Fairchild provides us a platform to aggressively expand our profitability in a highly fragmented industry. With the addition of Fairchild, our industry leading cost structure has further improved in a significant manner and we are now well positioned to generate substantial shareholder value as we integrate operations of the two companies."
With the acquisition, Fairchild Semiconductor became a wholly-owned subsidiary of ON Semiconductor, with Fairchild no longer being a publicly-traded company and no longer listed on NASDAQ. The move, according to ON Semiconductor, creates a leader in the power semiconductor market with combined revenue of approximately $5 billion, diversified across multiple markets with a strategic focus on automotive, industrial and smartphone end markets. Additionally, ON Semiconductor expects to achieve annual cost savings run rate of $160 million by the end of 2017, $200 million by the end of 2018, and $225 million by the end of 2019—numbers which are based off of Fairchild’s 2015 annual results.
ON Semiconductor also announced a new organizational structure, which according to the company, reflects the evolution over the years of ON Semiconductor’s product portfolio to highly differentiated power management, imaging, and analog solutions from standard products. The new organization is comprised of three reporting units – Power Solutions Group, headed by Bill Hall, Analog Solutions Group, headed by Bob Klosterboer, and Image Sensor Group, headed by Taner Ozcelik. The operations of System Solutions Group have been absorbed in the three reporting units.
View the ON Semiconductor press release.
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