Infineon Technologies (Korea CEO Seung-Soo Lee) is selling its main backend manufacturing plants in Cheonan, Korea and Cavite, Philippines, and is seeking to improve profitability by combining in-house production with outsourced production.

Infineon announced on the 22nd that it has signed an agreement with ASE Technology Holdings to sell two backend manufacturing plants owned by Infineon in Cavite, Philippines and Cheonan, Korea to a subsidiary of ASE.

ASE is a leading provider of independent semiconductor manufacturing services for assembly and test.

These plants are currently operated under the corporate names of Infineon Technologies Manufacturing (Cavite, Philippines) and Infineon Technologies Power Semitec (Cheonan), and will be acquired by ASE Inc. and ASE Korea, respectively.

After the acquisition, ASE said it will continue to operate both businesses with their current employees and further develop them to support a wider range of customers.

ASE and Infineon have signed a long-term supply agreement, under which Infineon will continue to provide services for new products as well as its existing services, supporting customers and fulfilling existing commitments.

Infineon's balanced manufacturing strategy, combining in-house production and outsourced manufacturing, is a key factor for the company's profitable growth.

ASE will integrate production volumes in Cavite and Cheonan and provide best-in-class manufacturing services across the industry, while Infineon and ASE will leverage mutual synergy potential and create attractive growth opportunities for both companies.

“We have a strong team with excellent capabilities at both sites in Cavite and Cheonan and an excellent track record of high quality standards,” said Alexander Gorski, Vice President and Head of Backend Operations at Infineon. “ASE has been a trusted strategic partner to Infineon for many years and is an excellent buyer to continue and further strengthen this success. The sale of this site is in line with Infineon’s manufacturing strategy and will enable further growth while delivering synergies and enhancing supply chain resilience.”

“Automotive and power management are strategic focus areas for ASE. The acquisition of Infineon’s Cavite and Cheonan sites demonstrates ASE’s strong commitment to establishing a strategic long-term partnership with Infineon to develop backend manufacturing solutions that meet future growth opportunities,” said Dr. Tien Wu, Chief Operating Officer of ASE. “Given Infineon’s leadership in automotive and power semiconductors and ASE’s leading position in backend semiconductor manufacturing, this partnership will create a win-win solution for the entire ecosystem from producers to end users.”

Infineon Technologies Power Semitec is a back-end manufacturing plant located in Cheonan with approximately 300 employees. Infineon Technologies Cavite is a back-end manufacturing plant located in the Philippines with approximately 900 employees.

The acquisition is expected to close in the second quarter of 2024, subject to the satisfaction of all pending closing conditions.