UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 28, 2024

Or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

(Commission File Number) 001-39317 

ON SEMICONDUCTOR CORPORATION

(Exact name of registrant as specified in its charter)  

Delaware	36-3840979
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

5701 N. Pima Road

Scottsdale, AZ 85250

(602) 244-6600

(Address, zip code and telephone number, including area code, of principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	ON	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  x

The number of shares outstanding of the issuer's class of common stock as of the close of business on July 24, 2024:

Title of Each Class	Number of Shares
Common Stock, par value $0.01 per share	428,356,117

ON SEMICONDUCTOR CORPORATION FORM 10-Q

TABLE OF CONTENTS

Item 1. Financial Statements (unaudited)	4
Consolidated Balance Sheets	4
Consolidated Statements of Operations and Comprehensive Income	5
Consolidated Statements of Stockholders' Equity	6
Consolidated Statements of Cash Flows	8
Notes to Consolidated Financial Statements	9
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3. Quantitative and Qualitative Disclosures About Market Risk	34
Item 4. Controls and Procedures	35

Item 1. Legal Proceedings	36
Item 1A. Risk Factors	36
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3. Defaults Upon Senior Securities	37
Item 4. Mine Safety Disclosures	37
Item 5. Other Information	37
Item 6. Exhibits	38
Signatures	39

(See the glossary of selected terms immediately following this table of contents for definitions of certain abbreviated terms.)

ON SEMICONDUCTOR CORPORATION

FORM 10-Q

GLOSSARY OF SELECTED ABBREVIATED TERMS*

Abbreviated Term	Defined Term
0% Notes	0% Convertible Senior Notes due 2027
0.50% Notes	0.50% Convertible Senior Notes due 2029
1.625% Notes	1.625% Convertible Senior Notes due 2023
3.875% Notes	3.875% Senior Notes due 2028
ADAS	Advanced driver-assistance systems
Amended and Restated SIP	ON Semiconductor Corporation Amended and Restated Stock Incentive Plan, as amended
ASU	Accounting Standards Update
Commission or SEC	Securities and Exchange Commission
New Credit Agreement	Credit agreement, dated as of June 22, 2023, by and among the Company, as borrower, the several lenders party thereto, JP Morgan Chase Bank, N.A., as administrative agent, and certain other parties, providing for the Revolving Credit Facility
EFK	East Fishkill, New York fabrication facility
ESPP	ON Semiconductor Corporation 2000 Employee Stock Purchase Plan, as amended
Exchange Act	Securities Exchange Act of 1934, as amended
IP	Intellectual property
IRS	United States Internal Revenue Service
IT	Information Technology
Revolving Credit Facility	A $1.5 billion senior revolving credit facility created pursuant to the New Credit Agreement
ROU	Right-of-use
RSU	Restricted stock unit
SiC	Silicon carbide
Securities Act	Securities Act of 1933, as amended
U.S. or United States	United States of America

* Terms used, but not defined, within the body of the Form 10-Q are defined in this Glossary.

PART I: FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

ON SEMICONDUCTOR CORPORATION

CONSOLIDATED BALANCE SHEETS

(in millions, except share and per share data)

(unaudited)

	June 28, 2024		December 31, 2023
Assets
Cash and cash equivalents	$	2,231.0	$	2,483.0
Short-term investments	450.0		—
Receivables, net	887.2		935.4
Inventories	2,224.6		2,111.8
Other current assets	532.2		382.1
Total current assets	6,325.0		5,912.3
Property, plant and equipment, net	4,372.5		4,401.5
Goodwill	1,577.6		1,577.6
Intangible assets, net	275.0		299.3
Deferred tax assets	679.1		600.8
ROU financing lease assets	41.7		42.4
Other assets	387.9		381.3
Total assets	$	13,658.8	$	13,215.2
Liabilities and Stockholders’ Equity
Accounts payable	$	617.7	$	725.6
Accrued expenses and other current liabilities	684.3		663.2
Current portion of financing lease liabilities	0.4		0.8
Current portion of long-term debt	795.6		794.0
Total current liabilities	2,098.0		2,183.6
Long-term debt	2,545.7		2,542.6
Deferred tax liabilities	39.6		38.7
Long-term financing lease liabilities	21.7		22.4
Other long-term liabilities	595.4		627.3
Total liabilities	5,300.4		5,414.6
Commitments and contingencies (Note 9)
ON Semiconductor Corporation stockholders’ equity:
Common stock ($0.01 par value, 1,250,000,000 shares authorized, 622,068,261 and 616,281,996 issued, 428,217,874 and 426,386,426 outstanding, respectively)	6.2		6.2
Additional paid-in capital	5,283.3		5,210.9
Accumulated other comprehensive loss	(56.8)		(45.2)
Accumulated earnings	7,339.3		6,548.1
Less: Treasury stock, at cost: 193,850,387 and 189,895,570 shares, respectively	(4,232.5)		(3,937.4)
Total ON Semiconductor Corporation stockholders’ equity	8,339.5		7,782.6
Non-controlling interest	18.9		18.0
Total stockholders’ equity	8,358.4		7,800.6
Total liabilities and stockholders’ equity	$	13,658.8	$	13,215.2

See accompanying notes to consolidated financial statements

4

ON SEMICONDUCTOR CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(in millions, except per share data)

(unaudited)

	Quarters Ended				Six Months Ended
	June 28, 2024		June 30, 2023		June 28, 2024		June 30, 2023
Revenue	$	1,735.2	$	2,094.4	$	3,597.9	$	4,054.1
Cost of revenue	951.2		1,101.0		1,960.3		2,143.2
Gross profit	784.0		993.4		1,637.6		1,910.9
Operating expenses:
Research and development	156.5		145.3		306.5		283.7
Selling and marketing	68.6		71.6		137.7		143.4
General and administrative	85.0		87.2		180.3		163.1
Amortization of acquisition-related intangible assets	12.9		12.0		25.5		27.0
Restructuring, asset impairments and other charges, net	72.5		2.6		73.9		54.1
Total operating expenses	395.5		318.7		723.9		671.3
Operating income	388.5		674.7		913.7		1,239.6
Other income (expense), net:
Interest expense	(15.7)		(16.4)		(31.3)		(42.8)
Interest income	27.4		24.0		55.0		41.1
Loss on debt prepayment	—		—		—		(13.3)
Gain (loss) on divestiture of business	—		0.5		—		(0.6)
Other income (expense)	1.9		(1.3)		2.9		3.4
Other income (expense), net	13.6		6.8		26.6		(12.2)
Income before income taxes	402.1		681.5		940.3		1,227.4
Income tax provision	(63.7)		(104.4)		(148.2)		(188.1)
Net income	338.4		577.1		792.1		1,039.3
Less: Net income attributable to non-controlling interest	(0.2)		(0.5)		(0.9)		(1.0)
Net income attributable to ON Semiconductor Corporation	$	338.2	$	576.6	$	791.2	$	1,038.3
Net income for diluted earnings per share of common stock (Note 7)	$	338.2	$	577.0	$	791.2	$	1,039.1
Net income per share of common stock attributable to ON Semiconductor Corporation:
Basic	$	0.79	$	1.34	$	1.85	$	2.40
Diluted	$	0.78	$	1.29	$	1.82	$	2.32
Weighted-average shares of common stock outstanding:
Basic	429.1		431.7		428.6		431.8
Diluted	433.2		448.7		434.9		448.6
Comprehensive income (loss), net of tax:
Net income	$	338.4	$	577.1	$	792.1	$	1,039.3
Foreign currency translation adjustments	(2.0)		(3.0)		(4.3)		(2.7)
Effects of cash flow hedges and other adjustments	(2.6)		(4.8)		(7.3)		(11.5)
Other comprehensive income (loss), net of tax	(4.6)		(7.8)		(11.6)		(14.2)
Comprehensive income	333.8		569.3		780.5		1,025.1
Comprehensive income attributable to non-controlling interest	(0.2)		(0.5)		(0.9)		(1.0)
Comprehensive income attributable to ON Semiconductor Corporation	$	333.6	$	568.8	$	779.6	$	1,024.1

See accompanying notes to consolidated financial statements

5

ON SEMICONDUCTOR CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in millions, except share data) 

(unaudited)

	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss				Treasury Stock			Non-Controlling Interest
	Number of shares	At Par Value						Accumulated Earnings		Number of shares	At Cost				Total Equity
Balance at March 29, 2024	621,590,872	$	6.2	$	5,243.9	$	(52.2)	$	7,001.1	(191,656,539)	$	(4,075.1)	$	18.7	$	8,142.6
Shares issued pursuant to the ESPP	115,991	—		7.1		—		—		—	—		—		7.1
RSUs released and stock grant awards issued	361,389	—		—		—		—		—	—		—		—
Partial settlement - 0% Notes	7	—		—		—		—		—	—		—		—
Partial settlement of bond hedges - 0% Notes	—	—		—		—		—		(5)	—		—		—
Partial settlement of Warrants - 0% Notes	2	—		—		—		—		—	—		—		—
Payment of tax withholding for RSUs	—	—		—		—		—		(106,969)	(7.4)		—		(7.4)
Share-based compensation	—	—		32.3		—		—		—	—		—		32.3
Repurchase of common stock	—	—		—		—		—		(2,086,874)	(150.0)		—		(150.0)
Comprehensive income (loss)	—	—		—		(4.6)		338.2		—	—		0.2		333.8
Balance at June 28, 2024	622,068,261	$	6.2	$	5,283.3	$	(56.8)	$	7,339.3	(193,850,387)	$	(4,232.5)	$	18.9	$	8,358.4
Balance at December 31, 2023	616,281,996	$	6.2	$	5,210.9	$	(45.2)	$	6,548.1	(189,895,570)	$	(3,937.4)	$	18.0	$	7,800.6
Shares issued pursuant to the ESPP	115,991	—		7.1		—		—		—	—		—		7.1
RSUs released and stock grant awards issued	1,642,003	—		—		—		—		—	—		—		—
Partial settlement - 0% Notes	43	—		—		—		—		—	—		—		—
Partial settlement bond hedges - 0% Notes	—	—		—		—		—		(40)	—		—		—
Settlement of Warrants - 0% Notes	12	—		—		—		—		—	—		—		—
Partial settlement - 1.625% Notes	4,028,216	—		—		—		—		—	—		—		—
Payment of tax withholding for RSUs	—	—		—		—		—		(595,230)	(45.1)		—		(45.1)
Share-based compensation	—	—		65.3		—		—		—	—		—		65.3
Repurchase of common stock	—	—		—		—		—		(3,359,547)	(250.0)		—		(250.0)
Comprehensive income (loss)	—	—		—		(11.6)		791.2		—	—		0.9		780.5
Balance at June 28, 2024	622,068,261	$	6.2	$	5,283.3	$	(56.8)	$	7,339.3	(193,850,387)	$	(4,232.5)	$	18.9	$	8,358.4

See accompanying notes to consolidated financial statements

6

ON SEMICONDUCTOR CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in millions, except share data) 

(unaudited)

	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss				Treasury Stock			Non-Controlling Interest
	Number of shares	At Par Value						Accumulated Earnings		Number of shares	At Cost				Total Equity
Balance at March 31, 2023	610,278,043	$	6.1	$	4,633.6	$	(29.6)	$	4,826.1	(178,426,953)	$	(2,988.2)	$	19.0	$	6,467.0
Shares issued pursuant to the ESPP	83,858	—		5.9		—		—		—	—		—		5.9
RSUs released and stock grant awards issued	396,303	—		—		—		—		—	—		—		—
Partial settlement - 1.625% Notes	528,213	—		—		—		—		—	—		—		—
Partial settlement of bond hedges - 1.625% Notes	—	—		43.5		—		—		(528,205)	(43.5)		—		—
Payment of tax withholding for RSUs	—	—		—		—		—		(116,917)	(9.8)		—		(9.8)
Share-based compensation	—	—		31.6		—		—		—	—		—		31.6
Repurchase of common stock	—	—		—		—		—		(693,736)	(60.4)		—		(60.4)
Comprehensive income (loss)	—	—		—		(7.8)		576.6		—	—		0.5		569.3
Balance at June 30, 2023	611,286,417	$	6.1	$	4,714.6	$	(37.4)	$	5,402.7	(179,765,811)	$	(3,101.9)	$	19.5	$	7,003.6
Balance at December 31, 2022	608,367,713	$	6.1	$	4,670.9	$	(23.2)	$	4,364.4	(176,431,298)	$	(2,829.7)	$	18.5	$	6,207.0
Shares issued pursuant to the ESPP	220,714	—		13.2		—		—		—	—		—		13.2
RSUs released and stock grant awards issued	2,076,679	—		—		—		—		—	—		—		—
Partial settlement -1.625% Notes	621,311	—		—		—		—		—	—		—		—
Partial settlement of bond hedges - 1.625% Notes	—	—		50.4		—		—		(621,303)	(50.4)		—		—
Warrants and bond hedges, net - 0.50% Notes	—	—		(171.5)		—		—		—	—		—		(171.5)
Tax impact of warrants and bond hedges, net	—	—		92.3		—		—		—	—		—		92.3
Payment of tax withholding for RSUs	—	—		—		—		—		(695,323)	(57.4)		—		(57.4)
Share-based compensation	—	—		59.3		—		—		—	—		—		59.3
Repurchase of common stock	—	—		—		—		—		(2,017,887)	(164.4)		—		(164.4)
Comprehensive income	—	—		—		(14.2)		1,038.3		—	—		1.0		1,025.1
Balance at June 30, 2023	611,286,417	$	6.1	$	4,714.6	$	(37.4)	$	5,402.7	(179,765,811)	$	(3,101.9)	$	19.5	$	7,003.6

See accompanying notes to consolidated financial statements

7

ON SEMICONDUCTOR CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

(unaudited)

	Six Months Ended
	June 28, 2024		June 30, 2023
Cash flows from operating activities:
Net income	$	792.1	$	1,039.3
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	314.5		293.8
Loss on sale or disposal of fixed assets	1.0		4.8
Loss on divestiture of business	—		0.6
Loss on debt prepayment	—		13.3
Amortization of debt discount and issuance costs	5.6		5.8
Share-based compensation	65.3		59.3
Non-cash asset impairment charges	15.7		12.7
Change in deferred tax balances	(76.5)		(29.6)
Other	5.3		(9.3)
Changes in assets and liabilities:
Receivables	35.9		(106.0)
Inventories	(113.4)		(347.8)
Other assets	(99.2)		(29.6)
Accounts payable	(40.0)		(25.6)
Accrued expenses and other current liabilities	(1.5)		(175.3)
Other long-term liabilities	(43.9)		93.3
Net cash provided by operating activities	860.9		799.7
Cash flows from investing activities:
Purchase of property, plant and equipment	(376.9)		(752.1)
Proceeds from sale of property, plant and equipment	0.3		2.6
Deposits utilized for purchase of property, plant and equipment	1.9		19.5
Proceeds from sale or maturity of available-for-sale securities	—		20.8
Purchase of short-term investments	(450.0)		—
Payments related to acquisition of business	—		(236.3)
Other	(1.5)		—
Net cash used in investing activities	(826.2)		(945.5)
Cash flows from financing activities:
Proceeds for the issuance of common stock under the ESPP	13.1		13.2
Payment of tax withholding for RSUs	(45.2)		(56.5)
Repurchase of common stock	(250.0)		(164.1)
Issuance and borrowings under debt agreements	—		1,845.0
Reimbursement of debt issuance and other financing costs	—		4.5
Payment of debt issuance and other financing costs	—		(11.3)
Repayment of borrowings under debt agreements	—		(1,603.7)
Payment for purchase of bond hedges	—		(414.0)
Proceeds from issuance of warrants	—		242.5
Payment of financing lease obligations	(1.4)		(8.6)
Net cash used in financing activities	(283.5)		(153.0)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(3.1)		(1.0)
Net decrease in cash, cash equivalents and restricted cash	(251.9)		(299.8)
Cash, cash equivalents and restricted cash, beginning of period (Note 5)	2,485.0		2,933.0
Cash, cash equivalents and restricted cash, end of period (Note 5)	$	2,233.1	$	2,633.2

See accompanying notes to consolidated financial statements

8

ON SEMICONDUCTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1: Background and Basis of Presentation

ON Semiconductor Corporation (“onsemi,” “we,” “us,” “our,” or the “Company”), with its wholly and majority-owned subsidiaries, operates under the onsemiTM brand. The Company is organized into three operating and reportable segments: the Power Solutions Group ("PSG"), the Analog and Mixed-Signal Group ("AMG"), and the Intelligent Sensing Group ("ISG"). During the first quarter of 2024, onsemi reorganized the existing divisions within certain of its operating and reportable segments and renamed the Advanced Solutions Group ("ASG") reportable segment to AMG. See Note 2: ''Revenue and Segment Information'' for additional information regarding the segment reorganization.

The Company's fiscal calendar year begins on January 1 and ends on December 31, with each fiscal quarter containing a thirteen-week accounting period. The quarters ended June 28, 2024 and June 30, 2023 contained 91 days each. The six months ended June 28, 2024 and June 30, 2023 contained 180 days and 181 days, respectively.

The accompanying unaudited financial statements as of and for the quarter and six months ended June 28, 2024 have been prepared following generally accepted accounting principles in the United States of America ("GAAP") for interim financial reporting and the rules and regulations of the SEC for interim reporting. Accordingly, the unaudited financial statements do not include all of the information and footnotes required by GAAP for audited financial statements. The balance sheet as of December 31, 2023 was derived from the Company's audited financial statements but does not include all disclosures required by GAAP for annual financial statements. In management's opinion, the interim information contains all adjustments, which include normal recurring adjustments necessary for a fair statement of the results for the interim periods. The footnote disclosures related to the interim financial information contained herein are also unaudited. Such financial information should be read in conjunction with the consolidated financial statements and related notes thereto for the year ended December 31, 2023, included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on February 5, 2024 (the "2023 Form 10-K").

Use of Estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses during the reporting period. Management evaluates these estimates and judgments on an ongoing basis and bases its estimates on experience, current and expected future conditions, third-party evaluations, and various other assumptions that management believes are reasonable under the circumstances. Significant estimates have been used by management in conjunction with the following: (i) calculation of future payouts for customer incentives and amounts subject to allowances and returns; (ii) valuation and obsolescence relating to inventories; (iii) measurement of valuation allowances against deferred tax assets and evaluations of uncertain tax positions; and (iv) testing for impairment of long-lived assets and goodwill. Additionally, during periods where it becomes applicable, significant estimates will be used by management in determining the assumptions used in business combinations. Actual results may differ from the estimates and assumptions used in the consolidated financial statements.

9

ON SEMICONDUCTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(unaudited)

Note 2: Revenue and Segment Information

Revenue

The Company's revenue is primarily from product sales, and to a much lesser extent from manufacturing services and product development agreements. For the quarters and six months ended June 28, 2024 and June 30, 2023, revenue recognized from product sales as a percentage of total revenue was approximately 98% and revenue recognized from manufacturing services and product development agreements was approximately 2% of total revenue.

Revenue disaggregated by end-markets and product technologies was as follows (in millions):

	Quarters Ended				Six Months Ended
	June 28, 2024		June 30, 2023		June 28, 2024		June 30, 2023
End-Markets:
Automotive	$	906.9	$	1,061.8	$	1,924.1	$	2,047.8
Industrial	468.0		609.3		944.1		1,165.5
Other*	360.3		423.3		729.7		840.8
Total	$	1,735.2	$	2,094.4	$	3,597.9	$	4,054.1
* Other primarily includes the end-markets of computing, consumer, networking and communications.
Product Technologies:
Intelligent Power	$	898.0	$	1,064.2	$	1,851.4	$	1,991.5
Intelligent Sensing	310.8		400.3		673.7		828.5
Other	526.4		629.9		1,072.8		1,234.1
Total	$	1,735.2	$	2,094.4	$	3,597.9	$	4,054.1

Remaining Performance Obligations

A significant portion of the Company's orders are firm commitments that are non-cancellable, including certain orders or contracts with a duration of less than one year. Certain of the Company's customer contracts are multi-year agreements that include firmly committed amounts ("Long-term Supply Agreements" or "LTSAs") for which the remaining performance obligations as of June 28, 2024 are approximately $14.7 billion (excluding the remaining performance obligations for contracts having a duration of one year or less). The Company expects to recognize approximately 30% of this amount as revenue during the next twelve months upon shipment of products under these contracts. Total revenue estimates are based on negotiated contract prices and demand quantities, and could be influenced by risks and uncertainties, including manufacturing or supply chain constraints, modifications to customer agreements and regulatory changes, among other factors. Accordingly, the actual revenue recognized for the remaining performance obligation in future periods may significantly fluctuate from these estimates.

Certain LTSAs include non-cancellable capacity payments from the customer, which are generally due within 30 days of the agreement. These payments reserve production availability or are prepayments for the same purpose and are not recognized as revenue until the performance obligations are satisfied. Payments received in advance of the satisfaction of performance obligations are recorded as contract liabilities. The Company fulfilled certain performance obligations and recognized revenue of $23.3 million and $16.8 million for the quarters ended June 28, 2024 and June 30, 2023, respectively, and $35.4 million and $31.6 million for the six months ended June 28, 2024 and June 30, 2023, respectively, related to contract liabilities outstanding as of the end of each respective prior year.

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ON SEMICONDUCTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(unaudited)

Contract Balances

Contract assets and contract liabilities were as follows (in millions):

	As of
	June 28, 2024		December 31, 2023
Contract assets included in:
Other current assets	$	190.0	$	83.1
Other assets	4.0		12.0
Total	$	194.0	$	95.1
Contract liabilities included in:
Other current liabilities	$	112.0	$	87.6
Other long-term liabilities	185.0		216.6
Total	$	297.0	$	304.2

Segment Information

The Company is organized into three operating and reportable segments consisting of PSG, AMG and ISG. These segments represent management's view of the business, and gross profit is used to evaluate its performance, the progress of major initiatives and the allocation of resources.

PSG reportable segment formerly included the divisions of Advanced Power Division, and Integrated Circuits, Protection and Signal Division ("IPS"). During the first quarter of 2024, management reorganized them to the divisions of Automotive Power Division, Industrial Power Division and Multi-Market Power Division (“MPD”). Further, the IPS division was split, with portions remaining in MPD and portions moving to the new Integrated Circuits Division ("ICD") within the AMG reportable segment. Management performed a goodwill impairment analysis on the divisions (which were the reporting units) prior to and after the reorganization and did not identify an impairment.

Revenue and gross profit for the operating and reportable segments were as follows (in millions):

	PSG(1)		AMG(1)		ISG		Total
For the quarter ended June 28, 2024:
Revenue from external customers	$	835.2	$	647.8	$	252.2	$	1,735.2
Gross profit	$	348.8	$	321.9	$	113.3	$	784.0
For the quarter ended June 30, 2023:
Revenue from external customers	$	977.4	$	791.9	$	325.1	$	2,094.4
Gross profit	$	468.0	$	370.2	$	155.2	$	993.4
For the six months ended June 28, 2024:
Revenue from external customers	$	1,709.5	$	1,344.8	$	543.6	$	3,597.9
Gross profit	$	714.2	$	660.7	$	262.7	$	1,637.6
For the six months ended June 30, 2023:
Revenue from external customers	$	1,838.3	$	1,536.6	$	679.2	$	4,054.1
Gross profit	$	864.4	$	714.2	$	332.3	$	1,910.9

(1)During the first quarter of 2024, the Company reorganized certain reporting units and its segment reporting structure. As a result of the reorganization of divisions within PSG and AMG, the prior-period amounts have been reclassified to conform to current-period presentation.

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ON SEMICONDUCTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(unaudited)

The Company had one customer, a distributor, whose revenue accounted for approximately 12% and 11% of the total revenue for the quarters ended June 28, 2024 and June 30, 2023, respectively, and approximately 11% and 10% of the total revenue for the six months ended June 28, 2024 and June 30, 2023, respectively.

Revenue for the operating and reportable segments disaggregated into geographic locations based on sales billed from the respective country and sales channel was as follows (in millions):

	Quarter Ended June 28, 2024
	PSG		AMG		ISG		Total
Geographic Location:
Hong Kong	$	230.3	$	162.2	$	61.0	$	453.5
Singapore	206.8		160.8		22.7		390.3
United Kingdom	187.7		122.7		103.4		413.8
United States	147.7		145.7		31.5		324.9
Other	62.7		56.4		33.6		152.7
Total	$	835.2	$	647.8	$	252.2	$	1,735.2
Sales Channel:
Distributors	$	515.2	$	348.4	$	91.4	$	955.0
Direct customers	320.0		299.4		160.8		780.2
Total	$	835.2	$	647.8	$	252.2	$	1,735.2
	Six Months Ended June 28, 2024
	PSG		AMG		ISG		Total
Geographic Location:
Hong Kong	$	433.6	$	312.0	$	113.3	$	858.9
Singapore	413.5		346.9		63.1		823.5
United Kingdom	390.2		256.5		211.1		857.8
United States	353.1		305.1		85.7		743.9
Other	119.1		124.3		70.4		313.8
Total	$	1,709.5	$	1,344.8	$	543.6	$	3,597.9
Sales Channel:
Distributors	$	965.6	$	692.0	$	203.4	$	1,861.0
Direct customers	743.9		652.8		340.2		1,736.9
Total	$	1,709.5	$	1,344.8	$	543.6	$	3,597.9

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ON SEMICONDUCTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(unaudited)

	Quarter Ended June 30, 2023
	PSG(1)		AMG(1)		ISG		Total
Geographic Location:
Hong Kong	$	282.4	$	187.8	$	60.0	$	530.2
Singapore	303.5		166.1		49.7		519.3
United Kingdom	191.0		166.7		91.7		449.4
United States	133.0		171.5		76.4		380.9
Other	67.5		99.8		47.3		214.6
Total	$	977.4	$	791.9	$	325.1	$	2,094.4
Sales Channel:
Distributors	$	583.4	$	391.6	$	152.7	$	1,127.7
Direct customers	394.0		400.3		172.4		966.7
Total	$	977.4	$	791.9	$	325.1	$	2,094.4
	Six Months Ended June 30, 2023
	PSG(1)		AMG(1)		ISG		Total
Geographic Location:
Hong Kong	$	524.3	$	372.5	$	123.8	$	1,020.6
Singapore	547.7		314.4		107.9		970.0
United Kingdom	359.7		330.2		172.8		862.7
United States	268.8		323.3		177.9		770.0
Other	137.8		196.2		96.8		430.8
Total	$	1,838.3	$	1,536.6	$	679.2	$	4,054.1
Sales Channel:
Distributors	$	1,104.7	$	722.4	$	339.8	$	2,166.9
Direct customers	733.6		814.2		339.4		1,887.2
Total	$	1,838.3	$	1,536.6	$	679.2	$	4,054.1

(1)During the first quarter of 2024, the Company reorganized certain reporting units and its segment reporting structure. As a result of the reorganization of divisions within PSG and AMG, the prior-period amounts have been reclassified to conform to current-period presentation.

The Company operates in various geographic locations. Sales to external customers have little correlation to where products are manufactured or the location of the end-customers. It is, therefore, not meaningful to present operating profit by geographical location.

The Company does not discretely allocate assets to its operating segments, nor does management evaluate operating segments using discrete asset information. The consolidated assets used in manufacturing are generally shared and are not specifically ascribed to operating and reportable segments. In situations where the carrying amounts assigned to an asset group need to be evaluated for recoverability, judgment is used to determine the carrying amounts of the asset group based on the facts and circumstances.

13

ON SEMICONDUCTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(unaudited)

Property, plant and equipment, net by geographic location, is summarized below (in millions):

	As of
	June 28, 2024		December 31, 2023
United States	$	1,431.3	$	1,456.5
South Korea	1,399.4		1,360.8
Czech Republic	566.9		559.7
Philippines	235.1		252.9
China	246.5		252.2
Malaysia	193.1		199.3
Vietnam	154.4		164.3
Other	145.8		155.8
Total	$	4,372.5	$	4,401.5

Note 3: Recent Accounting Pronouncements and Other Developments

Pending Adoption

Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07")

In November 2023, the FASB issued ASU 2023-07 to enhance disclosures about significant segment expenses. The amendments in this ASU require a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and to provide in interim periods all disclosures about a reportable segment's profit or loss and assets that are currently required annually. The amendments in this ASU also clarify circumstances in which an entity can disclose multiple segment measures of profit or loss and provide new segment disclosure requirements for entities with a single reportable segment. For public business entities, the provisions of ASU 2023-07 are effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The guidance will be applied retrospectively to all periods presented in the financial statements. ASU 2023-07 will be applicable for the Company's financial statements for the year ended December 31, 2024. Management is currently evaluating and understanding the requirements under this new standard.

Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09")

In December 2023, the FASB issued ASU 2023-09 to enhance disclosures about income taxes. The amendments in this ASU require a public entity to disclose in tabular format, using both percentages and reporting currency amounts, specific categories in the rate reconciliation and to provide additional information for reconciling items that meet a quantitative threshold. The amendments in this ASU also require taxes paid (net of refunds received) to be disaggregated by federal, state and foreign taxes and further disaggregated for specific jurisdictions to the extent the related amounts exceed a quantitative threshold. For public business entities, the provisions of ASU 2023-09 are effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. Management is currently evaluating the requirements under this new standard.

SEC Climate Disclosure

In March 2024, the SEC issued final rules requiring registrants to include comprehensive climate-related disclosures in annual reports and registration statements. As adopted, the final rules require large accelerated filers to make their first climate-related disclosures for fiscal years beginning in 2025. However, in April 2024, the SEC issued an order voluntarily staying the effectiveness of the new rules pending the completion of judicial review of certain legal challenges to their validity. Management is currently evaluating these rules as adopted as well as monitoring the status of the related litigation and the SEC’s stay.

14

ON SEMICONDUCTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(unaudited)

Note 4: Restructuring, Asset Impairments and Other Charges, Net

Details of restructuring, asset impairments and other charges, net are as follows (in millions):        

	Restructuring		Asset Impairments(1)		Other Charges		Total
Quarter ended June 28, 2024
2024 Business Realignment	$	52.5	$	15.7	$	3.1	$	71.3
Other	0.2		—		1.0		1.2
Total	$	52.7	$	15.7	$	4.1	$	72.5
	Restructuring		Asset Impairments(1)		Other Charges		Total
Six months ended June 28, 2024
2024 Business Realignment	$	52.5	$	15.7	$	3.1	$	71.3
Other	1.2		—		1.4		2.6
Total	$	53.7	$	15.7	$	4.5	$	73.9

(1) During the quarter and six months ended June 28, 2024, asset impairment charges primarily related to property, plant and equipment.

A summary of changes in accrued restructuring balance was as follows (in millions):

	As of						As of
	December 31, 2023		Charges		Usage		June 28, 2024
Employee separation charges	$	17.9	$	53.7	$	(11.6)	$	60.0

2024 Business Realignment

During the second quarter of 2024, to further align with the "Fab Right" manufacturing strategy and consolidate its global footprint, the Company announced a restructuring plan that impacted approximately 1,300 employees. Approximately 1,000 employees were notified of their employment termination and around 300 additional employees were reassigned or asked to relocate to another onsemi site. In connection with these actions the Company expects to incur severance costs, related benefit expenses and other ancillary charges totaling approximately $75 million of which approximately $53 million was recognized during the quarter and six months ended June 28, 2024. Certain of the employees notified of their employment termination are required to render future service beyond a minimum retention period in order to receive severance benefits, and the related expense will be recognized ratably over the respective service periods, substantially all of which is expected to be recognized during the remainder of 2024.

Of the aggregate expenses relating to the actions announced during 2024, the Company paid approximately $3 million related to approximately 200 terminated employees and had approximately $49.0 million accrued as of June 28, 2024. The remaining employees subject to this realignment are expected to be relocated or terminated and substantially all applicable severance and related benefit payments are expected to be paid over the next twelve months.

The Company continues to evaluate employee positions and locations for potential operating improvements and efficiencies and may incur additional severance and related charges in the future.

Note 5: Balance Sheet Information and Other Supplemental Disclosures

Goodwill

Goodwill is tested for impairment annually on the first day of the fourth quarter, or more frequently, if events or changes in circumstances (each, a "triggering event") would more likely-than-not reduce the fair value of a reporting unit below its carrying value.

As a result of the segment reorganization during the first quarter of 2024 discussed in Note 2: ''Revenue and Segment Information,'' management performed a goodwill impairment analysis on the divisions (which were the reporting units) prior to

15

ON SEMICONDUCTOR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(unaudited)

and after the reorganization and did not identify an impairment. In connection with the reorganization, the Company changed its reporting units structure, which resulted in the reallocation of $25.9 million of goodwill, presented on a prospective basis, from PSG to AMG based on the relative fair values of the businesses transferred.

There was no change in the overall balance of goodwill from December 31, 2023 to June 28, 2024.

The following table summarizes goodwill by operating and reportable segments (in millions): 

	As of
	June 28, 2024								December 31, 2023
	Goodwill		Accumulated Impairment Losses		Reallocation		Carrying Value		Goodwill		Accumulated Impairment Losses		Carrying Value
Operating and Reportable Segments:
PSG	$	708.0	$	(31.9)	$	(25.9)	$	650.2	$	708.0	$	(31.9)	$	676.1
AMG	1,536.4		(748.9)		25.9		813.4		1,536.4		(748.9)