There is now a 30-day period for public comment after which the Consent Order will come into force.

The FTC states: “The merged company would have a combined share of over 60 percent in the worldwide market for Insulated-Gate Bipolar Transistors specifically designed and calibrated for automotive ignition systems, or Ignition IGBTs. Without a divestiture, it is likely that the proposed merger would substantially lessen competition in the worldwide market for Ignition IGBTs, resulting in higher prices and reduced innovation.”

Ignition IGBTs function as solid-state switches in the ignition systems of automotive internal combustion engines.

“Phoenix-based ON and Fairchild, headquartered in Sunnyvale, California, both develop, manufacture, and market a wide range of semiconductors,” added the FTC, “they are each other’s closest competitors for Ignition IGBTs sold to automotive suppliers, who then incorporate Ignition IGBTs into the ignition systems that they sell to automakers.”

It was generally thought that, when ON Semiconductor and Fairchild agreed the acquisition back in November, that the deal had been done to keep Fairchild from falling under the control of Tsinghua, the acquisitive Chinese investment fund which is trying to build a semiconductor powerhouse in China.

The FTC ruling states: “The proposed consent order, preserves competition by requiring ON to divest its Ignition IGBT business to Chicago-based manufacturer Littelfuse, Inc. within 10 days of the close of the transaction. The divestiture will include design files and intellectual property that Littelfuse needs to manufacture ON’s Ignition IGBTs.”