News: Suppliers
26 August 2021
onsemi to acquire silicon carbide materials manufacturer GTAT for $415m
Power semiconductor IC supplier ON Semiconductor of Phoenix, AZ, USA has entered into a definitive agreement to acquire silicon carbide (SiC) and sapphire materials manufacturer GT Advanced Technologies Inc of Hudson, NH, USA for $415m. Founded in 1994, GTAT has experience in crystalline growth, including SiC.
The transaction is expected to better position onsemi to secure and grow the supply of SiC and to meet rapidly growing customer demand for SiC-based solutions in the sustainable ecosystem, including power switching devices for improving system efficiency in electric vehicles (EVs), EV charging and energy infrastructure. onsemi reckons that combining its manufacturing capabilities with GTAT’s technical expertise will accelerate SiC development and position it to better serve customers as the sustainable ecosystem rapidly ramps up over the next decade. The enhanced SiC capability is expected to allow onsemi to assure customers of the supply of critical components and to further commercialize intelligent power technologies.
“This transaction reflects our confidence and stated commitment to meaningfully invest in silicon carbide solutions to support the creation of intelligent power and sensing technologies to help build a sustainable future,” says onsemi’s president & CEO Hassane El-Khoury. “We are focused on deepening our leadership and innovation in game-changing technologies that support the automotive and industrial sectors, and GTAT brings outstanding technical capabilities and expertise in developing wafering-ready silicon carbide, which we intend to accelerate and expand to better empower customers in our high-growth end markets,” he adds.
“Today’s announcement marks the start of a new chapter for GTAT,” says GTAT’s president & CEO Greg Knight. “onsemi is strategically positioned to scale our capabilities, providing the resources and platform to maximize the potential of our cutting-edge production techniques and ensure we remain on the forefront of advanced crystalline growth.”
The acquisition also reinforces onsemi’s commitment to make substantial investments in disruptive, high-growth technologies, consistent with its recently announced 2025 target financial model described during its Analyst Day presentation. Capital expenditures are expected to be about 12% of revenue in 2022 and 2023, as onsemi invests to drive differentiation and leadership, including in SiC. The transaction is not expected to impact the company’s 2025 target financial model.
onsemi plans to invest in expanding GTAT’s R&D efforts to advance 150mm and 200mm SiC crystal growth technology, while also investing in the broader SiC supply chain, including fab capacity and packaging.
The transaction, which has been unanimously approved by the boards of directors of both onsemi and GTAT, is expected to close in first-half 2022. Completion is subject to regulatory approvals and other customary closing conditions. Approval of onsemi’s stockholders is not required in connection with the proposed transaction.
onsemi intends to fund the transaction through cash on hand and available capacity under its existing revolving credit facility. The firm expects the transaction to be marginally dilutive to its non-GAAP earnings per share in the immediate term and to be accretive within one year after close.
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