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Fujitsu Semiconductor and ON Semiconductor Announce Increased Strategic Partnership

YOKOHAMA, Japan & PHOENIX--(BUSINESS WIRE)--

Fujitsu Semiconductor Limited and ON Semiconductor (Nasdaq: ON) today announced an agreement that ON Semiconductor will purchase a 30 percent incremental share of Fujitsu’s 8-inch wafer fab in Aizu-Wakamatsu, resulting in 40 percent ownership when the purchase is completed. The purchase is scheduled to be completed on April 1, 2018, subject to certain regulatory approvals and other closing conditions.

The two companies entered into an agreement in 2014, under which ON Semiconductor obtained a 10 percent ownership interest in Fujitsu’s Aizu 8-inch fab. Initial transfers began in 2014, and successful production and ramp-up of wafers began in June 2015. ON Semiconductor continues to increase demand at the Aizu 8-inch fab, and both companies determined that further strategic partnership will maximize the value both companies provide.

ON Semiconductor plans to increase ownership to 60 percent by the second half of 2018 and to 100 percent in the first half of 2020, allowing ON Semiconductor to add capacity to their global footprint. This additional capacity will allow ON Semiconductor to continue scaling its business based on demand and enable increased supply chain flexibility.

“We believe that transforming into a globally competitive company is the key for the continuous growth of the Aizu 8-inch fab. Furthering our strategic partnership with ON Semiconductor, who provides a broad product portfolio, will enable the Aizu 8-inch fab to secure future growth,” said Kagemasa Magaribuchi, president of Fujitsu Semiconductor Limited. “We believe that the growth of the Aizu 8-inch fab will contribute to maintaining and expanding a strong workforce and assist with the development of the regions.”

“We have had a strong and successful partnership with Fujitsu since announcing our investment in 2014,” said Keith Jackson, president and CEO of ON Semiconductor. “We believe furthering our partnership with Fujitsu Semiconductor will enable us to maintain our industry-leading manufacturing cost structure and also help us optimize our capital spending in coming years. This is a strategic investment for ON Semiconductor to secure additional manufacturing capacity, in support of our accelerated production needs and for revenue growth in coming years.”

Manufacturing is a core competency for ON Semiconductor, and approximately 75 percent of manufacturing operations are done internally through the company’s industry leading cost structure.

About Fujitsu Semiconductor

Fujitsu Semiconductor Group includes a system memory group that is focused on high quality, high performance Ferroelectric random access memory (FRAM), wafer foundry group that has excellent technology and support, and the sales business of Fujitsu Electronics and overseas sales companies. Headquartered in Yokohama, we established as a subsidiary of Fujitsu Limited on March 21, 2008. Through its global sales and development network, with sites in Japan and throughout Asia, Europe, and the Americas, we offer semiconductor solutions to the global marketplace. For more information, visit http://www.fujitsu.com/jp/fsl/en/.

About ON Semiconductor

ON Semiconductor (ON) is driving energy efficient innovations, empowering customers to reduce global energy use. The company is a leading supplier of semiconductor-based solutions, offering a comprehensive portfolio of energy efficient power management, analog, sensors, logic, timing, connectivity, discrete, SoC and custom devices. The company’s products help engineers solve their unique design challenges in automotive, communications, computing, consumer, industrial, medical, aerospace and defense applications. ON Semiconductor operates a responsive, reliable, world-class supply chain and quality program, a robust compliance and ethics program, and a network of manufacturing facilities, sales offices and design centers in key markets throughout North America, Europe and the Asia Pacific regions. For more information, visit http://www.onsemi.com.

ON Semiconductor and the ON Semiconductor logo are registered trademarks of Semiconductor Components Industries, LLC. All other brand and product names appearing in this document are registered trademarks or trademarks of their respective holders. Although the company references its Web site in this news release, such information on the Web site is not to be incorporated herein.

This press release contains forward-looking statements, such as those relating to the likelihood, timing and results of the acquisition of ownership interests in this joint venture, within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, could be deemed forward-looking statements, particularly statements about investment in the joint venture, the manufacturing capacity of the joint venture, ON Semiconductor’s cost structure and the future financial performance of ON Semiconductor. Forward-looking statements are often characterized by the use of words such as “believes,” “estimates,” “expects,” “projects,” “may,” “will,” “intends,” “plans” or “anticipates,” or by discussions of strategy, plans or intentions. All forward-looking statements in this document are made based on our current expectations, forecasts, estimates and assumptions and involve risks, uncertainties and other factors that could cause results or events to differ materially from those expressed in the forward-looking statements. Among these factors are any regulatory review and approval processes; effects of exchange rate fluctuations; the cyclical nature of the semiconductor industry; our ability to successfully manufacture in increasing volumes on a cost-effective basis and with acceptable quality for our current products; legislative, regulatory and economic developments; changes in manufacturing yields; risks associated with acquisitions and dispositions; risks associated with our substantial leverage and restrictive covenants in our debt agreements that may be in place from time to time; risks associated with our worldwide operations, including foreign employment and labor matters associated with unions and collective bargaining arrangements, as well as man-made and/or natural disasters affecting our operations and finances/financials; the threat or occurrence of international armed conflict and terrorist activities both in the United States and internationally; risks related to new legal requirements, including laws, rules and regulations related to taxes; and risks involving environmental or other governmental regulation. Additional factors that could affect our future results or events are described in the 2016 Annual Report on Form 10-K filed with the SEC on February 28, 2017 ("2016 Form 10-K"), Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. You should carefully consider the trends, risks and uncertainties described in this document, our 2016 Form 10-K and other reports filed with or furnished to the SEC before making any investment decision with respect to our securities. Readers are cautioned not to place undue reliance on forward-looking statements. We assume no obligation to update such information except as may be required by law.

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