GlobalFoundries sells the East Fishkill plant

GlobalFoundries sells the former IBM semiconductor plant in Dutchess County, which it purchased four years ago, focusing on exploiting its three major manufacturing facilities in Malta. Dresden, Germany; and Singapore.

The buyer is ON Semiconductor, which produces power chips and pays $ 430 million for the new facility, which will be ON & # 39; s largest. The Phoenix-based Fortune 500 company will use the new facility to transition from creating microprocessors using older, 200mm technology to produce them on larger 300mm silicon wafers.

Thomas Global, CEO of GlobalFoundries, said the company is exploiting its foundries that have the scale to be globally competitive. It previously sold a less fab in Singapore. Caulfield also called the Malta factory GlobalFoundries & # 39; "most advanced plant."

GlobalFoundries will work with ON Semiconductor for a three and a half year transition. ON paid $ 100 million at the end of the deal and will pay the remaining $ 330 million by 2022, when it takes full control of the facility.

ON is committed to employing at least 950 East Fishkill employees and creating an additional 150 positions. No jobs will be lost, says a GlobalFoundries spokeswoman.

GlobalFoundries will transfer its ongoing business from Fab 10, which its East Fishkill fab is called, to its other facilities, including the massive Fab 8 factory in Malta, where it employs more than 3,000 people. It will start producing 300mm chips for ON next year, and continue to produce them until the transition is completed in 2022.

The agreement also includes a technology transfer and development agreement and a technology license agreement. The product lines GlobalFoundries and ON do not overlap; Caulfield said they are at "completely different ends of the spectrum".

The $ 15 billion Malta plant, which started producing a decade ago, has room to increase production by 40 percent, says Caulfied, adding that many companies can grow at that rate without investing in a new facility. "

GlobalFoundries' financial image has been listening for many years of heavy investment by Mubadala Investment Company, an Abu Dhabi sovereignty fund.

" This is the first year we have not only positive cash flow but significant positive cash flow. says Caulfield Monday afternoon.

ON has committed to spend $ 720 million on Fab 10 capital projects, according to a announcement of the agreement on Monday morning by Gov. Andrew Cuomo. Based on this commitment, Empire State Development offers $ 17.5 million in grants towards the purchase, as well as $ 22.5 million in Excelsior Jobs Program tax credits, based on the company's meeting its settlement obligations.

The company can also benefit from its proximity to the SUNY Polytechnic Institute and its College of Nanoscale Sciences and Engineering.

"SUNY has a program they start in power electronics," Caulfield said. "That's right in the (ON) room."

A SUNY Poly spokesman could not be reached for comments.

"The increased capacity and capacity enabled by this expansion is our response to meeting critical market needs," said Keith Jackson, ON Semiconductor's President and CEO. "This expansion would not have been possible without the support and award from Empire State Development and their willingness to cooperate with us.

" ON Semiconductor is an ideal partner for GlobalFoundries, and this agreement is a transformational step in our journey of building GlobalFoundries This is a partnership that enables GlobalFoundries to optimize our assets globally and intensify our investments in the differentiated technologies that burn our growth while ensuring a long-term future for the Fab 10 plant and our employees. The East Fishkill Plant Ownership will be transferred to ON Semiconductor over a three-year period. The Phoenix company paid $ 100 million to GlobalFoundries at the conclusion of the agreement and will pay the remaining $ 330 million by 2022 when it will take full control of

GlobalFoundries had purchased the East Fishkill facility and another in Burlington, Vt, late 2014 from IBM, which also paid GlobalFoundries $ 1.5 billion to increase the cash-generating unit, which lost $ 261 million in the first half of 2014.