On Semiconductor Inc. here has signed a major silicon foundry deal with South Korea's Hynix Semiconductor Inc. Hynix will supply production support to On Semiconductor for their power management products. The deal is reportedly worth $100 million, sources familiar with the companies said.

"Hynix's cost-conscious business model and advanced manufacturing services will help On Semiconductor expand its leadership position in the power management revolution," On Semiconductor's executive said.

On Semiconductor has fabs in Phoenix, Rhode Island and Japan. It also has a small, 1.5-micron fab in Piestany, Slovakia. On Semiconductor also outsources about 15 to 20 percent of its digital-oriented chip production to foundries. Before this announcement, On Semiconductor's main foundry was Singapore's Chartered Semiconductor Manufacturing Pte. Ltd.

On Semiconductor had been expanding its fab capacity to meet sudden demand in the marketplace. But on Thursday, the company lowered its forecast amid weakness in the automotive and wireless markets.

Previously, it provided guidance that its second quarter 2003 revenues would be flat as compared to the first quarter. The company's revenues for the first quarter of 2003 were $266.5 million.

By: DocMemory
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