POCATELLO — One of the Gate City’s largest employers is up for sale.

LA Semiconductor’s Pocatello wafer fabrication facility, which employs hundreds of local residents to produce silicon wafers for various high-tech applications, is now for sale through the San Diego-based Macquarie Semiconductor & Technology Inc. following court approval as the company operates under receivership amid ongoing legal battles with its former owner.

FTI Consulting Inc., the Washington, D.C.-based company appointed as receiver for LA Semiconductor in December, received court authorization in August to retain Macquarie as the remarketing agent. A federal court judge granted final approval on Sept. 12, allowing the sales process to move forward.

Macquarie’s semiconductor and technology team brings over 25 years of industry experience, having completed more than 50 fabrication facility disposition projects and facilitated over $3.5 billion in semiconductor equipment sales, according to a Tuesday news release announcing the sale process. The company will receive a 3 percent fee on the sale price, with a cap on out-of-pocket expenses.

Brian Lee, associate director in Macquarie Group’s Commodities and Global Markets business, said there is strong demand for onshoring semiconductor manufacturing in the United States following recent global supply chain disruptions, according to the news release.

“Now is the ideal time to invest in a fab such as LA Semiconductor — leveraging government incentives, advanced discrete technologies, and a skilled workforce,” Lee said in the news release.

Pat Sedlmayer, co-general manager of LA Semiconductor’s Pocatello plant, said the decision to sell aligns with strategic objectives to streamline operations while maintaining the facility’s status as an ITAR-registered, onshore semiconductor foundry, according to the news release.

“Buyers are prioritizing ready-to-run brownfield fabs that can be brought online faster with fewer execution risks than greenfield builds, boosting market activity inside the United States,” Sedlmayer said in the news release.

The other co-general manager of LA Semiconductor, Tony Little, added, “The Pocatello fab is at its most stable and efficient operational level since its acquisition from onsemi in October 2022, supported by process improvements and the development of proprietary intellectual property,” “The success of operations in the fab are largely due to its people, with over 35 percent of engineering and maintenance staff having over 10 years experience…”

The Tuesday news release said the Pocatello facility spans over 554,000 square feet of building space and includes more than 57,000 square feet of cleanroom space, with an additional 16,000 square feet available for cleanroom expansion. The site has operated as a U.S. semiconductor foundry since 1970, with the current fabrication facility constructed in 1997.

FTI Consulting told the Journal this week that its primary objective is to preserve business continuity and support employees throughout the legal process. In May, FTI consulting addressed rumors of significant layoffs at the plant, which former employees had reported to the Journal.

According to court records, the Pocatello plant continues to operate in the black, recording both receipts and disbursements of about $27 million as of the end of July.

The FTI receivership began after onsemi sued LA Semiconductor and its founder Mike Ward in December, alleging contract breaches and claiming the company’s financial issues threatened critical component production for customers including the U.S. Department of Defense.

A federal judge in Ohio appointed FTI Consulting as receiver in December with the arrangement becoming permanent in February.

On June 16, LA Semiconductor and Ward filed counterclaims against onsemi, including breach of contract and tortious interference, according to court records. Onsemi filed a motion to dismiss these counterclaims July 28. Court-ordered mediation was ordered to begin after Sept. 1 in federal court, court records show.

FTI has filed regular monthly status reports detailing its management of daily operations, negotiations with onsemi regarding various agreements and efforts to address employment issues, court records show.

LA Semiconductor was founded in 2021 as a U.S.-owned, fully operational pure-play semiconductor foundry for analog, digital and mixed-signal products. The company positioned itself to serve growing demand for tailored domestic manufacturing solutions and dedicated onshore supply, the Tuesday news release said.

Following the acquisition from onsemi, LA Semiconductor operated the 180-nanometer capable pure-play contract fabrication facility to serve automotive, defense, aerospace, medical, industrial and commercial industries. The plant is committed to continuing to provide reliable, high-quality semiconductor components meeting customer specifications, according to the news release.

The sale of LA Semiconductor and ongoing legal dispute comes amid a heightened focus on domestic semiconductor manufacturing capabilities. Recent global supply chain disruptions as the result of the current administration’s tariffs and approach to foreign trade has highlighted what could be seen as the strategic importance of onshore production, driving increased investment and innovation in the semiconductor sector.

The Biden-Harris administration had previously worked to ensure a resilient and secure supply of foundational semiconductors, according to a government fact sheet, stating they’re “critical to U.S. national and economic security.”

The fact sheet added, “These semiconductors are essential to key sectors of the U.S. economy, powering cars, medical devices, critical infrastructure, key aerospace and defense systems and the goods and services we rely on every day.”

Government incentives for semiconductor manufacturing, combined with the advanced discrete technologies and an experienced workforce could position the Pocatello plant as an attractive acquisition target for companies seeking to expand their U.S. manufacturing capacity.

The receivership and planned sale reflect broader challenges facing semiconductor companies as they navigate complex supply chain relationships, financial pressures and the need to maintain critical production capabilities for defense and commercial applications.

The outcome of the ongoing legal proceedings and mediation process may influence the timeline and structure of the eventual sale, as all parties work to resolve disputes while maintaining the facility’s operational status and employment levels.

Interested parties seeking information about the sale can contact Brian Lee at brian.lee@macquarie.com or Thomas Luscher at thomas.luscher@macquarie.com. Media inquiries should be directed to media@lasemiconductor.com.