ON Semiconductor announced the closure of a sub-division related to the Quantenna business
Sep 20,2022
On September 19, ON Semiconductor issued an announcement showing that on September 16, 2022, the company approved an investment exit plan to close a sub-sector of its Advanced Solutions Group division.
ON Semiconductor said this will further enable the company to focus investments on strategic priority areas, including smart power and smart sensing, simplifying its operations and reducing costs. The segment's revenue is less than 3% of the company's consolidated 2021 revenue and is generally tied to the company's legacy Quantenna business.
According to the announcement, the divestiture plan is likely to lower the fair value of the reporting unit below its book value. As of the exit plan approval date, its allocated goodwill balance was approximately $215 million and its unamortized intangible asset balance was approximately $58 million. For the purpose of this exit plan, ON Semiconductor expects to be impaired on almost all such amounts related to goodwill and intangible assets. During the second quarter ended July 1, 2022, the company previously disclosed and recorded a goodwill impairment charge of $115 million associated with this reporting unit.
For this exit plan, ON Semiconductor is evaluating the impact of related exit costs, including employee severance and related benefit expenses, as well as other contract termination costs, which are not expected to be significant overall.
ON Semiconductor said this will further enable the company to focus investments on strategic priority areas, including smart power and smart sensing, simplifying its operations and reducing costs. The segment's revenue is less than 3% of the company's consolidated 2021 revenue and is generally tied to the company's legacy Quantenna business.
According to the announcement, the divestiture plan is likely to lower the fair value of the reporting unit below its book value. As of the exit plan approval date, its allocated goodwill balance was approximately $215 million and its unamortized intangible asset balance was approximately $58 million. For the purpose of this exit plan, ON Semiconductor expects to be impaired on almost all such amounts related to goodwill and intangible assets. During the second quarter ended July 1, 2022, the company previously disclosed and recorded a goodwill impairment charge of $115 million associated with this reporting unit.
For this exit plan, ON Semiconductor is evaluating the impact of related exit costs, including employee severance and related benefit expenses, as well as other contract termination costs, which are not expected to be significant overall.