ON Semiconductor (ON) 10-K risk factor changes: FY2023 vs FY2022

We assume no obligation to update such information, which [removed: speak] [added: speaks] only as of the date made, except as may be required by law.

Investing in our securities involves a high degree of risk and uncertainty, and you should carefully consider the trends, risks and uncertainties described below and other information in this Form 10-K and subsequent reports filed with or furnished to the [removed: SEC before making any investment decision with respect to our securities.]

The manufacturing and other operations required to produce our products are highly dependent on the efficient operation of numerous processes, including processes contingent upon [removed: third party] [added: third-party] component manufacturers and other service providers, and any disruption in these processes could have a material adverse effect on our business and results of operations.

In the event of any such operational disruption, we may experience difficulty in beginning production of replacement components or products at new facilities or transferring production to other [added: existing facilities, any of which could result in a loss of future revenues and materially adversely affect our business and results of operations.]

Shortages could occur in various essential raw materials, and if we are unable to obtain adequate supplies of raw materials in a timely manner, the costs of our raw materials [removed: increases] [added: increase] significantly, their quality deteriorates or they give rise to compatibility or performance issues in our products, our results of operations could be materially adversely affected.

[removed: If] [added: In addition, if] we are unable to utilize our manufacturing facilities, testing facilities and external manufacturers at expected or minimum purchase obligation levels, or if production capacity increases while revenue does not, the fixed costs and other operating expenses associated with these facilities and arrangements will not be fully absorbed, resulting in higher average unit costs and lower gross profits, which could have a material adverse effect on our results of operations.

For example, [removed: following the announcement] [added: in light] of our [removed: commitment] [added: goal] to [removed: achieving] [added: achieve] net zero emissions by 2040, we may take actions to pursue our goal of generating net-zero emissions that may result in material expenditures that could impact our financial condition or results of operations and/or could disrupt our existing operations.

Similarly, the contingent risks associated with transferring our existing operations to an acquirer, as is the case with several transition services being provided in connection with [added: some of] our [removed: recent] [added: prior] divestitures, could materially impact our financial condition or results of operations and/or could disrupt our existing [removed: operations.][added: operations, especially if the acquirer is unable to meet its commitments under any transition services agreements or if the acquirer encounters financial difficulty.]

Furthermore, our increased investment in manufacturing capacity (including [removed: the recent acquisition of EFK and] increased investment in capacity for SiC-based products and technology), while concurrently [removed: winding down our QCS business and] divesting other non-strategic operations, may adversely impact our existing operations, require additional management time and effort to implement successfully, and lead to higher than anticipated capital expenditures.

[removed: To the extent that we underinvest in our research] and development efforts, fail to recognize the need for innovation with respect to our products, or that our investments and capital expenditures in research and development do not lead to sales of new products, we may be unable to bring to market technologies and products attractive to customers, and so our business, financial condition and results of operations may be materially adversely affected.

Products are [removed: frequently] [added: often] replaced by more technologically advanced substitutes and, as demand for older technology falls, the price at which such products can be sold drops.

[removed: In addition to global macroeconomic effects,] [added: For example, public health crises like] the COVID-19 pandemic and related adverse public health developments [removed: have been causing, and] may [removed: continue to cause,] [added: cause] disruption to our domestic and international [removed: operations and sales activities.][added: operations.]

[removed: In addition, there may be] [added: Any] associated worker absenteeism, quarantines and restrictions on certain of our employees’ ability to perform their jobs, office and factory closures or restrictions, labor shortages, disruptions to ports and other shipping infrastructure, border closures [removed: or] [added: and/or] other travel or health-related [removed: restrictions.][added: restrictions could, depending on the magnitude of such effects on our manufacturing activities (or activities of our suppliers, third-party distributors or sub-contractors), could cause disruption and delay to our supply chain, manufacturing and product shipments.]

Because a significant portion of our revenue is derived from customers in the automotive and industrial end-markets, [added: including revenue pursuant to our long-term supply agreements,] a downturn or lower sales to customers in either end-market could materially adversely affect our business and results of operations.

Sales into the automotive and industrial end-markets represented approximately [removed: 40.4%] [added: 52%] and [removed: 27.5%] [added: 28%] of our revenue, respectively, for the year ended December 31, [removed: 2022.][added: 2023.]

[removed: The automotive industry is cyclical and the industrial sector tends to thrive during a time of economic] expansion, and, as a result, our customers in each end-market are sensitive to changes in general economic conditions, inflationary pressure, [added: increases in interest rates,] disruptive innovation and end-market preferences, which can adversely affect sales of our products and, correspondingly, our results of operations.

[removed: Additionally,] [added: Lastly,] the quantity and price of our products sold to customers in each end-market could decline despite continued growth in such end-markets.

Further, to the extent we have long-term supply agreements with our customers [added: in multiple end-markets] which includes fixed pricing, we could be subject to fluctuating manufacturing costs that could negatively impact our profitability.

The imposition of [removed: tariffs] [added: tariffs, export controls] and [added: other] trade restrictions as a result of international trade disputes or changes in trade policies or political conditions may adversely affect our sales and profitability.

For example, additional [removed: tariffs] [added: tariffs, other export regulations] and the related geopolitical uncertainty between the United States and China and other countries may cause decreased end-market demand for our products from distributors and other customers, which could have a material adverse effect on our business and results of operations.

Additional [removed: tariffs] [added: tariffs, export controls] or [added: other] trade restrictions between the two countries could materially adversely affect our results of operations.

In addition, tariffs on components that we import from certain nations that have imposed, or may in the future impose, tariffs [added: may adversely affect our profitability unless we are able to exclude such components from the tariffs or we raise prices for our products, which may result in our products becoming less attractive relative to products offered by our competitors.]

We have sizeable sales and operations in the Asia/Pacific region and [removed: Europe] [added: Europe,] and a significant amount of this business is transacted in currency other than U.S. dollars.

[added: In addition, while a significant percentage of our cash is generated outside the] United States, many of our liabilities, including our outstanding indebtedness, and certain other cash payments, such as share repurchases, are payable in the United States in U.S. dollars.

If our technologies are subject to claims of infringement on the IP rights of others, efforts to address such claims could [removed: have a material adverse effect on our results of operations.][added: have]

[removed: In addition,] [added: Further,] our assertion of IP rights often results in the other party seeking to assert alleged IP rights of its own against us, which may materially and adversely impact our business.

[added: Should we be unable to protect our IP, competitors] may develop products or technologies that duplicate our products or technologies, benefit financially from innovations for which we bore the costs of development and undercut the sales and marketing of our products, all of which could have a material adverse effect on our business and results of operations.

[removed: We may be subject to disruptions] [added: Disruptions] or breaches of our information technology systems [removed: that] could irreparably damage our reputation and our business, expose us to liability and materially adversely affect our results of operations.

The secure processing, maintenance and transmission of this information is [removed: critical] [added: important] to our operations and business strategy.

[removed: We may be subject to disruptions or breaches of our information technology caused by computer viruses, illegal] hacking, criminal fraud or impersonation, acts of vandalism or terrorism or employee error.

Our [removed: cyber security] [added: cyber-security] measures and/or those of our third-party service providers and/or customers may not detect or prevent such security breaches.

[removed: The costs to us to reduce the risk of or alleviate cyber security breaches and vulnerabilities could be significant, and our] [added: Our] efforts to address these problems may not be successful and could result in interruptions and delays that may materially impede our sales, [removed: manufacturing,] [added: manufacturing operations,] distribution or other critical functions.

Any [removed: such] compromise of our information security could result in the misappropriation or unauthorized publication of our confidential business or proprietary information or that of other parties with which we do business, an interruption in our operations, the unauthorized transfer of cash or other of our assets, the unauthorized release of customer or employee data or a violation of privacy or other laws.

The semiconductor industry [removed: has been] [added: continues to be] subject to increasing environmental regulations, particularly those [removed: environmental regulations] that control and restrict the use, transportation, emission, discharge, storage and disposal of certain chemicals, elements and materials used or produced in the semiconductor manufacturing process.

To the extent that we face unforeseen environmental or health and safety compliance costs or remediation expenses or liabilities that are not covered by indemnities or insurance, we may bear the full effect of such costs, expenses and liabilities, which could materially adversely [removed: affect our results of operations and financial condition.]

[removed: We could be subject to changes] [added: Changes] in tax legislation or [removed: have] exposure to additional tax liabilities, [removed: which] could adversely affect our results of operations and financial condition.

We conduct operations worldwide through our foreign subsidiaries and are, therefore, subject to complex income tax and transfer pricing [removed: regulations.][added: regulations in the United States and foreign jurisdictions.]

[removed: After our restructuring, most] [added: Most] of our income is taxable in the United States with a significant portion qualifying for preferential treatment as foreign-derived intangible income (“FDII”).

These changes, [removed: as] [added: if] adopted by countries, may increase tax uncertainty and may adversely affect our provision for income taxes, [added: which could have a material impact on our] results of operations and financial condition.

[removed: The] [added: Furthermore, the] impact of [removed: this] [added: any] new [added: tax] legislation may differ from our estimates, possibly materially, due to, among other things, changes in interpretations and assumptions the Company has made and future regulatory guidance.

SEC before making any investment decision with respect to our securities.

Such disruption and delays could materially adversely affect our business, results of operations and financial condition.

Further, if we need to rapidly increase our business and manufacturing capacity to meet increases in demand or expedited shipment schedules, this could strain our manufacturing and supply chain operations, and negatively impact our working capital.

Moreover, if we are unable to accurately forecast demand for our products, we may purchase more or fewer parts than necessary or incur costs for canceling, postponing or expediting delivery of parts.

If we purchase or commit to purchase inventory in anticipation of customer demand that does not materialize, or such inventory is rendered obsolete by the rapid pace of technological change, or

if customers reduce, delay or cancel orders, we may incur excess or obsolete inventory charges.

In addition, to streamline our operations and for efficiency purposes, we are pursuing a number of actions, including the outsourcing of certain internal business processes and the deployment of enhanced end-to-end digital processes (which, in some cases, include the use of AI) for certain business use cases.

Such opportunities for improvement and enhanced productivity bring risks associated with managing change, transition costs, and the potential for reduced productivity or user error, in addition to those risks specific to each new process.

To the extent that we underinvest in our research

Our future success depends on many factors, including the development of new technologies and effective commercialization and customer acceptance of our products, and our ability to increase our position in our current markets, expand into adjacent and new markets, and optimize operational performance.

In addition, some of our competitors may receive governmental subsidies or other incentives that give them a competitive advantage over us.

For example, the U.S. and the European Union have enacted legislation to provide funding and incentives for semiconductor research, development, and manufacturing in their respective regions.

If we are unable to access such funding or incentives, or if our competitors receive more funding or incentives than we do, we may be at a disadvantage in developing and producing new or improved products or technologies, which could adversely affect our market share, revenue and profitability.

The automotive industry is cyclical and the industrial sector tends to thrive during a time of economic

Changes in demand in these end-markets can significantly impact our operating results.

Additionally, public health crises like the COVID-19 pandemic have the potential to disrupt sales activities to customers in these end-markets, as well as the other end-markets we serve.

Furthermore, certain customers, from time to time, have sought and may seek to amend the delivery or other terms of their long-term supply agreements with us.

When any such contractual amendments are made, the timing, pricing or amount of products delivered under such long-term supply agreements may be modified in circumstances where we believe it advances the long-term customer relationship or provides us with other benefits.

Such an event could have an impact on our results of operations.

In addition, in the event a distributor were to face financial difficulty, experience significant operational disruptions or terminate its operations, our revenue and results of operations may be adversely affected.

Furthermore, if a significant distributor terminates its operations or were to merge with another distributor, we may be more reliant and dependent on the distribution network of our remaining distributors.

a material adverse effect on our results of operations.

Infringement or misappropriation of our IP could result in lost market and revenue opportunities, and if we are unable to enforce and protect our IP it could have an adverse impact on our competitive position and business.

We have experienced and expect to continue to experience disruptions, failures or breaches of our information technology environment, such as those caused by computer viruses, illegal

Although we are not aware of any cybersecurity incidents impacting us directly that have been material to us as of the year ended December 31, 2023, we continue to devote resources to reduce the risk of or alleviate cyber-security breaches and vulnerabilities and those costs could be significant.

Further, AI capabilities may be used to identify vulnerabilities and craft increasingly sophisticated cyber-security attacks.

We maintain cyber risk insurance, although an insufficiency of insurance coverage could adversely affect our cash flows and overall profitability.

Furthermore, our efforts to comply with evolving laws and regulations related to cybersecurity, such as the recently enacted SEC rules requiring disclosure of a material cybersecurity incident, may be costly and any failure to comply could result in investigations, proceedings, investor lawsuits and reputational damage.

Failure to comply with these laws or regulations could subject us to significant costs and liabilities.

affect our results of operations and financial condition.

For example, the OECD continues to advance proposals for modernizing international tax rules, including the introduction of global minimum tax standards.

Further, significant changes in our credit rating, disruptions in the global financial markets, including bank failures, or incurrence of new or refinancing of existing indebtedness at higher interest rates could have a material and adverse effect on our access to and cost of capital for future financings, and financial condition.

converted 1.625% Notes, the 0% Notes and/or the 0.50% Notes, as the case may be.

material adverse effect our financial condition and results of operations.

existing facilities, any of which could result in a loss of future revenues and materially adversely affect our business and results of operations.

In addition, although the CHIPS Act provides various incentives and tax credits to United States companies for domestic

semiconductor manufacturing, we may be unsuccessful (including, relative to the efforts of our competitors) in any efforts to obtain such incentives and tax credits.

The effects of the COVID-19 pandemic have had, and could continue to have, an adverse impact on our business, results of operations and financial condition.

Our business has been, and may continue to be, adversely impacted by the effects of the COVID-19 pandemic.

Depending on the magnitude of such effects on our manufacturing activities or those of our suppliers, third-party distributors or sub-contractors, our supply chain, manufacturing and product shipments could be delayed, which could materially adversely affect our business, results of operations and financial condition.

In addition, any economic downturn or recession brought on by the COVID-19 pandemic or other public health crises could adversely affect demand for our products and impact our results of operations and financial condition.

These effects, alone or taken together, could have a material adverse effect on our business, results of operations, legal exposure, or financial condition.

may adversely affect our profitability unless we are able to exclude such components from the tariffs or we raise prices for our products, which may result in our products becoming less attractive relative to products offered by our competitors.

In addition, while a significant percentage of our cash is generated outside the

When we seek to enforce our rights, we are often subject to claims that the IP right is invalid, is otherwise not enforceable or is licensed to the party against whom we are asserting a claim.

Should we be unable to protect our IP, competitors

We implemented certain restructuring during the year ended December 31, 2020.

The OECD, which represents a coalition of member countries, recommended changes to numerous long-standing tax principles related to transfer pricing and continues to develop new proposals including allocating greater taxing rights to countries where customers are located and establishing a minimum tax on global income.

In August 2022, the U.S. enacted the CHIPS Act and the IR Act.

It will take time for additional clarifying guidance and regulations to be issued, and this guidance will be required for a more complete interpretation of this new legislation.

This new legislation could have a material benefit or material adverse impact, and may have a material impact on our financial condition.

We are in the process of analyzing the potential aggregate current and future impacts of this legislation relative to how we do business, our cash flows and our results of operations.

With the increasing focus on corporate social and environmental responsibility in the semiconductor industry, a number of our

consolidations or certain other "change of control" transactions; make distributions to our stockholders; engage in restructuring activities; engage in certain sale and leaseback transactions; and issue or repurchase stock or other securities.

If interest rates were to increase, our debt service obligations on

Our Amended Credit Agreement and our interest rate swap agreements currently have an interest rate tied to the Secured Overnight Financing Rate (“SOFR”), but were previously tied to the LIBO Rate.

The phase-out of the LIBO Rate is underway and will conclude by July 1, 2023 when LIBO Rates and quotations are scheduled to be discontinued.

In response to the phasing out of the LIBO Rate, on March 15, 2022, President Biden signed the Adjustable Interest Rate (LIBOR) Act (the “LIBOR Act”), pursuant to which certain contracts that rely on the LIBO Rate and do not contain procedures for determining an alternative base rate in the event that the LIBO Rate is discontinued will transition from the LIBO Rate to SOFR, effective July 1, 2023.

While the LIBOR Act effectively established SOFR as the default replacement rate for the LIBO Rate, there can be no assurances that SOFR will become a widely accepted benchmark, or that SOFR or other alternative base rates will be more or less favorable than the LIBO Rate.

The discontinuance of the LIBO Rate and the adoption of SOFR and/or other alternative based rates could create volatility and instability in the financial markets and within banking and financial institutions.

Regardless, we intend to monitor any unforeseen impacts of the discontinuation of the LIBO Rate and the phasing in of SOFR and will attempt to work with our lenders to ensure the transition will have minimal impact on our financial condition.

However, we cannot provide any assurances that the impact of the discontinuation of the LIBO Rate and the phasing in of SOFR will not have a material adverse effect on our debt service obligations or our ability to refinance our debt on favorable terms.

The warrant

If we are unable to comply, or are unable to cause our suppliers to comply, with such policies or provisions or

These statements are based on current expectations and assumptions that are subject to risk, uncertainties, and other [removed: factors.][added: factors and speak only as of the filing date.]

Our revenue for the year ended December 31, [removed: 2022] [added: 2023] was [removed: $8,326.2] [added: $8,253.0] million, [removed: an increase] [added: representing a nominal decrease] of [removed: 23.5%] [added: 0.9%] from [removed: $6,739.8] [added: $8,326.2] million for the year ended December 31, [removed: 2021.][added: 2022.]

During [removed: 2022,] [added: 2023,] we reported net income attributable to onsemi of [removed: $1,902.2] [added: $2,183.7] million compared to [removed: $1,009.6] [added: $1,902.2] million in [removed: 2021.][added: 2022.]

Our operating income totaled [removed: $2,360.0] [added: $2,538.7] million during [removed: 2022] [added: 2023] compared to [removed: $1,287.6] [added: $2,360.0] million during [removed: 2021.][added: 2022.]

Our gross margin [removed: increased] [added: decreased] by approximately [removed: 870] [added: 190] basis points to [removed: 49.0%] [added: 47.1%] in [removed: 2022] [added: 2023] from [removed: 40.3%] [added: 49.0%] in [removed: 2021.][added: 2022.]

See discussion under "Results of Operations" for [removed: additional discussion on] the reasons for the fluctuations year over year.

Given the current conditions, we are actively managing [added: and have taken corrective actions in] our manufacturing [removed: activity] [added: capacity] and spending to align with [removed: our] [added: the] forecasted [added: 2024] demand.

We expect to continue to evaluate cost-saving initiatives to be able to align our overall cost structure, capital investments and other expenditures with our expected revenue, spending and capacity levels to help offset increased [added: manufacturing and operating] costs.

We have taken, and continue to take actions, including but not limited to, exiting product [removed: lines,] [added: lines] that do not support our gross margin improvements and strategic [removed: objectives.][added: objectives and aligning internal manufacturing capacity and resources to external demand.]

A discussion of our results of operations for the year ended December 31, [removed: 2022] [added: 2023] compared to December 31, [removed: 2021] [added: 2022] is included below.

For a discussion and comparison of the results of our operations for the year ended December 31, [removed: 2021] [added: 2022] with the year ended December 31, [removed: 2020,] [added: 2021,] refer to "Management's Discussion and Analysis of Financial Conditions and Results of Operations" in our Form 10-K for the year ended December 31, [removed: 2021] [added: 2022] filed with the SEC on February [removed: 14, 2022.][added: 6, 2023.]

| | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | | | | | | | | | | | | | Change | | | | | | | | | | | | | | | | | | | | |

| Cost of revenue | | | [removed: 4,249.0] [added: 4,369.5] | | | | | | [removed: 4,025.5] [added: 4,249.0] | | | | | | | | | | | | | | | | | | [removed: 223.5] [added: 120.5] | | | | | | | | | | | | | | | | | | | | |

| Gross profit | | | [removed: 4,077.2] [added: 3,883.5] | | | | | | [removed: 2,714.3] [added: 4,077.2] | | | | | | | | | | | | | | | | | | [removed: 1,362.9] [added: (193.7)] | | | | | | | | | | | | | | | | | | | | |

| Research and development | | | [removed: 600.2] [added: 577.3] | | | | | | [removed: 655.0] [added: 600.2] | | | | | | | | | | | | | | | | | | [removed: (54.8)] [added: (22.9)] | | | | | | | | | | | | | | | | | | | | |

| Selling and marketing | | | [removed: 287.9] [added: 279.1] | | | | | | [removed: 293.6] [added: 287.9] | | | | | | | | | | | | | | | | | | [removed: (5.7)] [added: (8.8)] | | | | | | | | | | | | | | | | | | | | |

| General and administrative | | | [removed: 343.2] [added: 362.4] | | | | | | [removed: 304.8] [added: 343.2] | | | | | | | | | | | | | | | | | | [removed: 38.4] [added: 19.2] | | | | | | | | | | | | | | | | | | | | |

[removed: | Amortization] [added: *Amortization] of [removed: acquisition-related intangible assets | | | 81.2 | | | | | | 99.0 | | | | | | | | | | | | | | | | | | (17.8) | | | | | | | | | | | | | | | | | | | | |][added: Acquisition-Related Intangible Assets*]

| Restructuring, asset impairments and other charges, net | | | [removed: 17.9] [added: 74.9] | | | | | | [removed: 71.4] [added: 17.9] | | | | | | | | | | | | | | | | | | [removed: (53.5)] [added: 57.0] | | | | | | | | | | | | | | | | | | | | |

| Goodwill and intangible asset impairment | | | [removed: 386.8] [added: —] | | | | | | [removed: 2.9] [added: 386.8] | | | | | | | | | | | | | | | | | | [removed: 383.9] [added: (386.8)] | | | | | | | | | | | | | | | | | | | | |

| Total operating expenses | | | [removed: 1,717.2] [added: 1,344.8] | | | | | | [removed: 1,426.7] [added: 1,717.2] | | | | | | | | | | | | | | | | | | [removed: 290.5] [added: (372.4)] | | | | | | | | | | | | | | | | | | | | |

| Operating income | | | [removed: 2,360.0] [added: 2,538.7] | | | | | | [removed: 1,287.6] [added: 2,360.0] | | | | | | | | | | | | | | | | | | [removed: 1,072.4] [added: 178.7] | | | | | | | | | | | | | | | | | | | | |

| Interest expense | | | [removed: (94.9)] [added: (74.8)] | | | | | | [removed: (130.4)] [added: (94.9)] | | | | | | | | | | | | | | | | | | [removed: 35.5] [added: 20.1] | | | | | | | | | | | | | | | | | | | | |

| Interest income | | | [removed: 15.5] [added: 93.1] | | | | | | [removed: 1.4] [added: 15.5] | | | | | | | | | | | | | | | | | | [removed: 14.1] [added: 77.6] | | | | | | | | | | | | | | | | | | | | |

| Loss on debt refinancing and prepayment | | | [removed: (7.1)] [added: (13.3)] | | | | | | [removed: (29.0)] [added: (7.1)] | | | | | | | | | | | | | | | | | | [removed: 21.9] [added: (6.2)] | | | | | | | | | | | | | | | | | | | | |

| Gain [added: (loss)] on divestiture of businesses | | | [removed: 67.0] [added: (0.7)] | | | | | | [removed: 10.2] [added: 67.0] | | | | | | | | | | | | | | | | | | [removed: 56.8] [added: (67.7)] | | | | | | | | | | | | | | | | | | | | |

| Other [removed: income,] [added: income (expense),] net | | | [removed: 21.7] [added: (7.2)] | | | | | | [removed: 18.0] [added: 21.7] | | | | | | | | | | | | | | | | | | [removed: 3.7] [added: (28.9)] | | | | | | | | | | | | | | | | | | | | |

[removed: | Other] [added: *Other] income (expense), [removed: net | | | 2.2 | | | | | | (129.8) | | | | | | | | | | | | | | | | | | 132.0 | | | | | | | | | | | | | | | | | | | | |][added: net*]

| Income before income taxes | | | [removed: 2,362.2] [added: 2,535.8] | | | | | | [removed: 1,157.8] [added: 2,362.2] | | | | | | | | | | | | | | | | | | [removed: 1,204.4] [added: 173.6] | | | | | | | | | | | | | | | | | | | | |

| Income tax provision [removed: benefit] | | | [removed: (458.4)] [added: (350.2)] | | | | | | [removed: (146.6)] [added: (458.4)] | | | | | | | | | | | | | | | | | | [removed: (311.8)] [added: 108.2] | | | | | | | | | | | | | | | | | | | | |

| Net income | | | [removed: 1,903.8] [added: 2,185.6] | | | | | | [removed: 1,011.2] [added: 1,903.8] | | | | | | | | | | | | | | | | | | [removed: 892.6] [added: 281.8] | | | | | | | | | | | | | | | | | | | | |

| Less: Net income attributable to non-controlling interest | | | [removed: (1.6)] [added: (1.9)] | | | | | | (1.6) | | | | | | | | | | | | | | | | | | [removed: —] [added: (0.3)] | | | | | | | | | | | | | | | | | | | | |

| Net income attributable to ON Semiconductor Corporation | | | $ | [removed: 1,902.2] [added: 2,183.7] | | | | | $ | [removed: 1,009.6] [added: 1,902.2] | | | | | | | | | | | | | | | | | $ | [removed: 892.6] [added: 281.5] | | | | | | | | | | | | | | | | | | | |

Revenue was [removed: $8,326.2] [added: $8,253.0] million and [removed: $6,739.8] [added: $8,326.2] million for [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] respectively.

The [removed: increase] [added: decrease] from [removed: 2021 to] 2022 [added: to 2023] of [removed: $1,586.4] [added: $73.2] million, or [removed: 23.5%,] [added: 0.9%,] was attributable to a [removed: 22.4%, 18.4%] [added: 12.4% decrease in revenue in ASG, partially offset by a 5.7%] and [removed: 41.7%] [added: 3.0%] increase in revenue in [removed: PSG, ASG] [added: PSG] and ISG, respectively, which [removed: is] [added: are] further explained below.

| | | | [removed: 2022] [added: 2023] | | | | | | As a % of Revenue (1) | | | | | | [removed: 2021] [added: 2022] | | | | | | As a % of Revenue (1) | | | | | | | | | | | |

| PSG | | | $ | [removed: 4,208.2] [added: 4,449.0] | | | | | [removed: 50.5] [added: 53.9] | | % | | | | $ | [removed: 3,439.1] [added: 4,208.2] | | | | | [removed: 51.0] [added: 50.5] | | % | | | | | | | | | |

| ASG | | | [removed: 2,841.3] [added: 2,488.5] | | | | | | [removed: 34.1] [added: 30.2] | | % | | | | [removed: 2,399.9] [added: 2,841.3] | | | | | | [removed: 35.6] [added: 34.1] | | % | | | | | | | | | |

| ISG | | | [removed: 1,276.7] [added: 1,315.5] | | | | | | [removed: 15.3] [added: 15.9] | | % | | | | [removed: 900.8] [added: 1,276.7] | | | | | | [removed: 13.4] [added: 15.3] | | % | | | | | | | | | |

| Total revenue | | | $ | [removed: 8,326.2] [added: 8,253.0] | | | | | | | | | | | $ | [removed: 6,739.8] [added: 8,326.2] | | | | | | | | | | | | | | | | |

The increases in our operating income and net income were primarily due to goodwill and intangible asset impairment charges related to our QCS wind down in 2022 amounting to $386.8 million, which did not reoccur in 2023.

During 2023, the semiconductor industry experienced a slow down due to softening demand.

We are monitoring the economic environment and related forecasts, and for indicators that would suggest the global economic slowdown could continue.

| Revenue | | | $ | 8,253.0 | | | | | $ | 8,326.2 | | | | | | | | | | | | | | | | | $ | (73.2) | | | | | | | | | | | | | | | | | | | |

There were no customers whose revenue exceeded 10% or more of total revenue for the year ended December 31, 2023.

This increase was primarily driven by our continued ramp up in SiC and other power automotive solutions, while the decrease was primarily driven by planned customer product exits and reduced demand driven by lower end-market requirements for these products.

Revenue from ASG decreased by $352.8 million, or approximately 12.4%, during 2023 compared to 2022, due to a decrease in revenue from our Power Management Division of $354.7 million, primarily driven by the planned end of life for targeted products as well as a general decline in demand in the computing and consumer end-markets.

Revenue from ISG increased by $38.8 million, or approximately 3.0%, during 2023 compared to 2022, which was largely driven by an increase in revenue from our Automotive Sensing Division of $117.4 million primarily due to the reallocation of internal capacity to products yielding higher average selling prices.

This was partially offset by a decrease of $78.7 million in our Industrial and Consumer Solutions Division due to capacity reallocation and planned product exits.

Gross profit was $3,883.5 million and $4,077.2 million for 2023 and 2022, respectively, representing a decrease of $193.7 million or approximately 5%.

For the overall Company, the decline in existing product revenue negatively impacted gross profit by approximately $400 million, and higher manufacturing costs at our EFK location, which include start up and ramp up costs, along with an unfavorable impact from our foundry business, negatively impacted gross profit by approximately $160 million.

This decrease was partially offset by the gross profit of approximately $320 million from new product sales.

Our gross margin decreased by 1.9% from 49.0% for the year ended December 31, 2022 to 47.1% for the year ended December 31, 2023, due to the impact of the factors explained above.

Explanation for the increase or decrease in gross profit amounts and gross margin percentages for the year ended December 31, 2023, compared to the year ended December 31, 2022 is provided below:

PSG gross profit and gross margin increased by $117 million and 0.1%, respectively, primarily driven by increased revenue from new product sales, which contributed approximately $320 million, and was partially offset by the impact of the decrease in revenue from existing products amounting to approximately $180 million.

ASG gross profit and gross margin decreased by $342.6 million and 6.4%, respectively, primarily driven by the decline in existing product revenue which impacted gross profit by approximately $250 million, as well as the higher manufacturing costs at our EFK location, which includes the unfavorable impact of our foundry business of approximately $120 million.

ISG gross profit and gross margin increased by $31.9 million and 1%, respectively, primarily driven by increased revenue in existing products due to favorable pricing and product mix.

The decrease was primarily due to a reduction in variable compensation expense, partially offset by an increase in new product development costs.

The increase was primarily due to expenses associated with information technology initiatives and a bad debt provision on outstanding receivable balances generated under an agreement with a business partner, which was partially offset by a decrease in variable compensation expense.

representing an increase of $57.0 million.

Charges in 2023 related primarily to the business realignment efforts during 2023.

The decrease was primarily due to the repayment of the balance under the Term Loan "B" Facility, which was repaid with proceeds from the 0.50% Notes.

Additionally, the 1.625% Notes matured and were repaid during October 2023.

*Interest income*

Interest income increased by $77.6 million, or approximately 500.6%, to $93.1 million during 2023 compared to $15.5 million in 2022, primarily due to the increase in interest rates during 2023 along with a strategic shift in our investment strategy.

Other income (expense), net was an expense of $7.2 million in 2023, compared to an income of $21.7 million in 2022.

During 2023 we recognized actuarial losses on pension plans of $4.0 million, whereas we recognized actuarial gains on pension plans of $22.1 million during 2022.

The decrease in our effective tax rate was due to the goodwill impairments in the prior year, which were not deductible for tax purposes, and a current year benefit due to the net release of unrecognized tax benefits.

In the near term, we expect to fund our cash requirements by utilizing any or a combination of these principal sources, including any amounts required to satisfy our current portion of long-term debt.

Our cash and cash equivalents were $2,483.0 million as of December 31, 2023 and our Revolving Credit Facility has approximately $1.1 billion available for future borrowings as of December 31, 2023.

- Purchase of property, plant & equipment of $1,575.6 million.

- Issuance of $1.5 billion of 0.50% Notes, the net proceeds of which were used to repay the existing indebtedness under the Term Loan "B" Facility, net cost of the related convertible note hedges, the related transaction fees and general corporate purposes.

- Repayment of $125 million under the Revolver due 2024 in the first quarter of 2023.

- Entering into the New Credit Agreement consisting of a $1.5 billion Revolving Credit Facility and draw down of $375 million to repay the entire outstanding balance under the Revolver due 2024 in the second quarter of 2023.

- Repayment of the 1.625% Notes amounting to $119.6 million in cash upon maturity and issuance of approximately 4.5 million shares of common stock to settle the excess over the principal.

respectively.

Our operating cash flows for the year ended December 31, 2023 decreased by $655.6 million, or 24.9%, compared to the year ended December 31, 2022 and was primarily attributable to increased working capital requirements related to our strategic investments in SiC inventory and our strategic investments in inventory for fab transitions, and payments related to the 2022 variable compensation.

The increase of $1,032.5 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily attributable to an increase in capital expenditures, the absence of any divestiture activities in 2023 and the remaining payment of $236.3 million related to the acquisition of our EFK location.

Our capital expenditures as a percent of revenue increased in 2023 to 19%, primarily as a result of investments to expand SiC manufacturing capacity.

During 2023, we replaced the Revolver due 2024 maturing on June 28, 2024 with the Revolving Credit Facility.

The increase was attributable to our strategy to focus on a product mix that yields higher margins, and an increase in average selling prices driven by strong market demand.

The increase in our operating income and net income was due to significantly better gross margins primarily driven by higher revenue in focused end-markets, favorable product mix, increase in average selling prices and savings from restructuring activities.

During the year ended December 31, 2022, our product demand remained strong as we achieved record annual revenues.

However, we are aware of and are monitoring the economic environment and related forecasts, which suggest global economic slowdowns could continue and potentially result in certain economies entering a recessionary period, which could include the United States.

During 2022, we achieved revenue growth as well as expanded our gross margin and operating margin.

The semiconductor industry conditions have resulted in increased costs throughout our supply chain.

In some cases, we have been able to increase our prices and pass these increased costs along to our customers, which also partially contributed to higher revenue for 2022.

| Revenue | | | $ | 8,326.2 | | | | | $ | 6,739.8 | | | | | | | | | | | | | | | | | $ | 1,586.4 | | | | | | | | | | | | | | | | | | | |

We had one customer, a distributor, whose revenue accounted for approximately 12% of the total revenue for the year ended December 31, 2022.

These increases primarily were driven by our strategy to focus on SiC, a product mix that yields higher margins and an increase in average selling prices driven by strong market demand.

Revenue from ASG increased by $441.4 million, or approximately 18.4%, during 2022 compared to 2021.

The revenue from our Automotive Division, Industrial Solutions Division and Mobile, Computing and Cloud Division increased by $224.2 million, $173.8 million and $77.1 million, respectively.

The increases primarily were due to our strategy to focus on a product mix that yields higher margins, and an increase in average selling prices driven by strong market demand.

Revenue from ISG increased by $375.9 million, or approximately 41.7%, during 2022 compared to 2021.

The revenue from our Automotive Sensing Division and our Industrial and Consumer Solutions Division increased by $357.3 million and $18.7 million, respectively.

The increase in revenue was due to our strategy to focus on a product mix that yields higher margins, and an increase in average selling prices driven by strong market demand.

Our gross profit increased by $1,362.9 million, or approximately 50%, from $2,714.3 million during 2021 to $4,077.2 million during 2022.

Gross margin increased to 49.0% during 2022 compared to 40.3% during 2021.

The significant increases in gross profit and gross margin were primarily driven by higher revenue, particularly in the

automotive and industrial end-markets, and a favorable product mix, which included price increases to resolve price-to-value discrepancies for our products.

The decrease was primarily due to a reduction in payroll and other related expenses associated with the wind down of QCS.

The decrease was primarily due to a reduction in payroll-related expenses due to census declines from hiring delays and attrition.

The increase was primarily due to higher variable compensation and stock compensation.

Charges in 2022 represent severance charges, contract termination costs and litigation expenses and primarily relate to the QCS wind down.

Amounts incurred during 2021 primarily related to the involuntary severance plan.

The decrease was primarily due to the lack of amortization of debt discount on our convertible notes due to the adoption of ASU 2020-06, the effect of the issuance of the 0% Notes, as a majority of the proceeds were utilized to repay higher rate debt.

our refinancing activities.

Other income, net was $18.0 million in 2021 compared to an income of $21.7 million in 2022, reflecting a change of approximately 20.6%.

The increase was primarily due to the fluctuations in foreign currencies resulting in increased transaction gains offset by losses on hedges that were realized.

The increase in our effective tax rate was substantially driven by the impact of nondeductible goodwill and foreign operations.

In the near term, we expect to fund our primary cash requirements through cash generated from operations and with cash and cash equivalents on hand.

We also have the ability to utilize our Revolving Credit Facility, which has approximately $1.5 billion available for future borrowings.

Our balance of cash and cash equivalents was $2,919.0 million as of December 31, 2022.

As part of our business strategy, we review acquisition and divestiture opportunities on a regular basis.

- The debt and equity capital markets could impact our ability to obtain needed financing on acceptable terms or to

Excluded from the discussion below is the EFK facility, which we acquired on December 31, 2022 for $406.3 million in cash, of which approximately $236.3 million was paid in January 2023.

- We paid approximately $1,005.0 million for capital expenditures.

- Borrowing of $500.0 million under the Revolving Credit Facility, the net proceeds of which were used to prepay the outstanding balance of $500.0 million under the Term Loan "B" Facility.

- Divestiture of manufacturing facilities in Oudenaarde, Belgium, South Portland, Maine, Pocatello, Idaho and Niigata, Japan for approximately $275.0 million in the aggregate.

Our operating cash flows for the year ended December 31, 2022 increased by $851.1 million, or 47.8%, compared to the year ended December 31, 2021 and was primarily attributable to a significant increase in net income due to our strategy to focus on a product mix that yields higher margins combined with increased demand and prices for our products.

As of December 31, [removed: 2022,] [added: 2023,] our gross long-term debt (including current maturities) totaled [removed: $3,228.3] [added: $3,379.9] million.

We have no interest rate exposure to rate changes on our fixed rate debt, which totaled [removed: $2,392.3] [added: $3,004.9] million.

We do have interest rate exposure with respect to [removed: the $836.0] [added: our Revolving Credit Facility, which had a $375.0] million balance [removed: of our variable interest rate debt outstanding] as of December 31, [removed: 2022.][added: 2023.]

[removed: A] [added: We estimate a] 50 basis point increase in interest rates would impact our expected annual interest expense for the next 12 months by approximately [removed: $5.4 million, inclusive of the impact of our interest rate swaps which hedge the risk of variability in the interest payment cash flows on a portion of our variable interest rate debt.][added: $1.9 million.]

The notional amount of foreign exchange contracts at December 31, [removed: 2022] [added: 2023] and [removed: 2021] [added: 2022] was [removed: $272.0] [added: $262.2] million and [removed: $288.3] [added: $272.0] million, respectively.

For example, we determined that based on a hypothetical weighted-average change of 10% in currency exchange rates, our operating income would have impacted our income before taxes by approximately [removed: $112.8] [added: $125.8] million for the year ended December 31, [removed: 2022,] [added: 2023,] assuming no offsetting hedge position or correlated activities.

However, this impact may be partially offset by the additional interest earned on our cash and cash equivalents.

Additionally, some of this impact would be offset by additional interest earned on our cash and cash equivalents should rates on deposits and investments also increase.

We provide [removed: industry leading] intelligent power and [added: intelligent] sensing solutions [added: with a primary focus towards automotive and industrial markets] to help our customers solve challenging problems and create [removed: cutting edge] [added: cutting-edge] products for a better future.

Our intelligent power solutions for [added: the] automotive [removed: allows] [added: industry allow] our customers to exceed range targets with lower weight and reduce system cost through efficiency.

Our intelligent sensing technologies support the next generation [removed: industry] [added: industry,] allowing for smarter factories and buildings while also enhancing the automotive mobility experience with imaging and depth sensing that make advanced vehicle safety and automated driving systems possible.

[removed: We are] [added: As of December 31, 2023, we were] organized into the following three operating and reportable segments: the Power Solutions Group ("PSG"), the Advanced Solutions Group ("ASG") and the Intelligent Sensing Group ("ISG").

Our primary focus continues to be on profitable revenue [added: and operating income] growth [added: by capturing high-growth megatrends] in our focused end-markets of automotive and industrial [removed: infrastructure, as well as obtaining longer-term supply arrangements with strategic end-customers.][added: infrastructure.]

We [removed: have made significant progress] [added: are focused] on [removed: gross margin and operating margin expansion by focusing] [added: achieving efficiencies in] our [added: operating and] capital [added: expenditures, capital] allocation on research and development investments and resources to accelerate growth in high-margin products and end-markets.

[removed: In 2023, our focus will be on ramping] [added: During the year, we ramped] up manufacturing at our [removed: recently acquired East Fishkill, New York fabrication ("EFK") facility,] [added: EFK location,] as well as [removed: investing to expand] [added: expanded] our [removed: facilities] [added: capacity] in [removed: the Czech Republic,] Hudson, New Hampshire, [added: Roznov, the Czech Republic,] and [added: Bucheon,] South Korea to increase our SiC manufacturing capabilities to meet the growing demand for our SiC-based solutions.

See Note [removed: 5: ''Acquisitions] [added: 7: ''Restructuring, Asset Impairments] and [removed: Divestitures''] [added: Other Charges, net'' and Note 9: ''Long-Term Debt''] in the notes to our audited consolidated financial statements included elsewhere in this Form 10-K for additional information related to our [removed: acquisition] [added: restructuring efforts] and [removed: divestiture activity.][added: financing activities.]

On December 31, 2022, we completed [removed: our] [added: the] acquisition of the [removed: EFK] [added: manufacturing] facility [removed: and] [added: at EFK along with] certain other assets and liabilities from GLOBALFOUNDRIES U.S. Inc. [removed: ("GFUS"), which was previously announced in April 2019,] [added: ("GFUS")] for total consideration of [added: $406.3 million.]

[removed: In connection with the acquisition agreement, we] [added: We] paid GFUS [added: $236.3 million,] $100.0 million and $70.0 million during [added: 2023,] 2020 and 2019, [removed: respectively, with the balance of $236.3 million paid on January 3, 2023.][added: respectively.]

During 2022, in line with our business strategy, we divested [removed: our] [added: four] wafer manufacturing facilities in Oudenaarde, Belgium, South Portland, Maine, Pocatello, Idaho and Niigata, Japan.

We [removed: agreed to] [added: entered into] wafer supply agreements with the respective buyers of these facilities to [removed: ensure that there is no disruption] [added: help minimize disruptions] in our ability to meet customer demand for our products.

See Note [removed: 4: ''Recent Accounting Pronouncements] [added: 3: ''Revenue] and [removed: Other Developments'''] [added: Segment Information''] in the notes to our audited consolidated financial statements included [removed: elsewhere in this Form 10-K for additional information.]

| | | | MOSFET products | | | | | | Foundry products / services | | | | | | [removed: LSI products] [added: Single Photon Detectors] | | | | | |

| | | | Power Module products | | | | | | Gate Driver products | | | | | | [removed: Single Photon Detectors] | | | | | |

| | | | Isolation products | | | | | | LSI products | | | | | | [removed: Sensors] | | | | | |

[removed: See Note 3: ''Revenue and Segment Information'' in the notes to our audited consolidated financial statements included] elsewhere in this Form 10-K for other information regarding our segments, their revenue and property, plant and equipment and the gross profit derived from each segment.

ASG designs and develops analog, mixed-signal, [removed: advanced logic, ASSPs and ASICs, RF] [added: Power Management ICs] and [removed: integrated power solutions] [added: Sensor Interface devices] for a broad base of end-users in [removed: different] [added: the Automotive, Industrial, Compute and Mobile] end-markets.

During [removed: 2022,] [added: 2023,] we [removed: entered] [added: continued to enter] into [removed: a number of] long-term supply agreements with certain strategic end-customers, which generally include minimum purchase [removed: commitments.][added: commitments or amended existing terms based on mutual agreements.]

Certain of our agreements, subject to our standard terms and conditions, have provisions allowing for [removed: termination at any time for convenience by either party.][added: renegotiation upon mutual agreement.]

The loss of one of our large customers would have a material adverse effect on the operations of the respective [removed: segment,] [added: segment] and may have a material adverse effect on our consolidated results of operations.

Sales to distributors accounted for approximately [removed: 58%] [added: 52%] of our revenue in [removed: 2022, 64%] [added: 2023, 58%] of our revenue in [removed: 2021] [added: 2022] and [removed: 60%] [added: 64%] of our revenue in [removed: 2020.][added: 2021.]

We had one distributor whose revenue accounted for approximately 12% [added: and 13%] of the total revenue for the [removed: year] [added: years] ended December 31, [removed: 2022.][added: 2022 and 2021, respectively.]

Our distributors resell our products to [added: OEMs,] contract [removed: manufacturers, OEMs among other companies.]

Sales to direct customers, accounted for approximately [removed: 42%] [added: 48%] of our revenue in [removed: 2022, 36%] [added: 2023, 42%] of our revenue in [removed: 2021] [added: 2022] and [removed: 40%] [added: 36%] of our revenue in [removed: 2020.][added: 2021.]

The following table sets forth our principal end-markets, the estimated percentage (based in part on information provided by our distributors) of our revenue generated from each end-market during [removed: 2022,] [added: 2023,] and sample applications for our products.

Other includes the end-markets of [added: computing, consumer, networking,] communication, [removed: consumer and computing.][added: etc.]

Our competitive strengths include our core competencies of leading-edge fabrication technologies, micro and module packaging expertise, breadth of product line and IP portfolio, [removed: high quality cost effective] [added: high-quality, cost-effective] manufacturing and supply chain management, which [removed: ensures] [added: helps to ensure] supply to our customers.

Our commitment to continual innovation allows us to provide an [removed: ever broader] [added: ever-broader] range of semiconductor solutions to our customers who differentiate in power density and power efficiency, the key performance characteristics driving our markets.

[removed: Competitors for] certain of ASG's products and solutions include: [added: TI, Analog Devices, Inc.,] Infineon, [added: STMicroelectronics, Renesas Electronics Corporation, Monolithic Power Systems Inc. and] NXP Semiconductors N.V. [removed: ("NXP"), STMicroelectronics and TI.][added: ("NXP").]

ISG differentiates itself from the competition through deep technical knowledge and close customer relationships to drive leading edge sensing performance [removed: for both human and] [added: primarily in] machine vision applications.

ISG has leveraged this expertise into [removed: market leading] [added: market-leading] positions in automotive and industrial applications, which allows us to offer technical and end-user applications knowledge to help customers develop innovative sensing solutions across a broad range of end-user needs.

We offer efficient, cost-effective global applications support from our technical information centers and solution engineering centers, allowing for applications that are developed in one region of [added: the world to be instantaneously available throughout all other regions.]

Our manufacturing processes use many raw materials, including silicon wafers, SiC wafers, laminate substrates, gold, copper, lead frames, mold compound, ceramic packages and various chemicals and [removed: gases] [added: gases,] as well as other production supplies used in our manufacturing processes.

However, suppliers may extend lead times, limit supplies or increase prices due to capacity constraints or other factors beyond our [removed: control, including any caused by the COVID-19 pandemic or other public health crises.][added: control.]

We currently have domestic design operations in Arizona, California, Idaho, New York, Oregon, Pennsylvania, Rhode [removed: Island, Texas, Utah] [added: Island] and [removed: Virginia.][added: Texas.]

We operate front-end wafer fabrication facilities in the [added: United States, the] Czech Republic, Japan, South Korea, [removed: Malaysia] and [removed: the United States] [added: Malaysia] and back-end assembly and test site facilities in Canada, China, Malaysia, the Philippines, Vietnam and the United States.

In addition to these front-end and back-end manufacturing operations, our facility in Hudson, New Hampshire manufactures SiC crystal boules and our [removed: facility] [added: facilities] in Rožnov pod Radhoštěm, [added: the] Czech Republic [added: and Bucheon, South Korea] manufactures silicon [added: and SiC] wafers that are used by a number of our facilities.

| Rožnov pod Radhoštěm, [added: the] Czech Republic | | | | | | ASG and PSG | | | | | | 438,882 | | |

| Bucheon, South Korea | | | | | | ASG and PSG | | | | | | [removed: 861,081] [added: 1,113,938] | | |

We are designing products in highly-differentiated markets focused on customer needs while optimizing our manufacturing footprint to support growth and maintain gross margins through efficiencies and new product development.

*Business Realignment*

During 2023, we realigned our operating models in ASG, Corporate information technology ("IT") organization and certain manufacturing locations in order to streamline our operations, achieve organizational efficiencies and consolidate resources into fewer, common sites across the world to align with the next phase of our multi-year "Fab Right" manufacturing strategy.

Under these business realignment efforts, approximately 1,900 employees were notified of their employment termination.

We incurred severance and related charges of approximately $59.1 million related to these actions in 2023.

2023 Financing activities

*0.50% Convertible Senior Notes due 2029*

On February 28, 2023, we completed the offering of $1.5 billion aggregate principal amount of our 0.50% Notes and utilized the net proceeds along with cash generated from operations to (i) repay $1,086.0 million of the outstanding indebtedness under the Term Loan “B” Facility and the related transaction fees and expenses, (ii) pay $171.5 million net cost of the related convertible note hedges after such costs were offset by the proceeds from the sale of warrants, and (iii) for general corporate purposes.

*New Credit Agreement*

On June 22, 2023, we entered into the New Credit Agreement to replace the Revolver due 2024, which was maturing on June 28, 2024.

We drew $375.0 million against the Revolving Credit Facility and repaid the entire outstanding balance under the Revolver due 2024.

We had previously repaid $125.0 million of the outstanding balance under the Revolver due 2024 during the first quarter of 2023.

As of December 31, 2023, we had approximately $1.1 billion available under the Revolving Credit Facility for future borrowings.

*1.625% Notes maturity and repayment*

On October 16, 2023, we repaid $119.6 million of the remaining outstanding principal amount of the 1.625% Notes in cash and settled the excess over the principal amount by issuing 4.5 million shares of our common stock.

Under the previously executed bond hedge agreements, we also repurchased an equivalent number of shares of our common stock for no additional consideration, to effectively offset the issuance of shares.

Acquisitions and Divestitures during 2021 and 2022

| 2023 Revenue (%) | | | 54% | | | | | | 30% | | | | | | 16% | | | | | |

We implement a platform-based design approach to rapidly proliferate product portfolios.

ASG offers technology that provides our customers system-level differentiation such as multi-phase controllers, gate drivers, DC-DC converters, AC-DC converters, ultrasonic sensors, inductive sensors, audiology digital signal processors, analog front ends, Bluetooth Low Energy, wired connectivity and more.

There were no distributors whose revenue exceeded 10% or more of total revenue for the year ended December 31, 2023.

manufacturers, and other end-customers.

| 2023 Revenue (%) | | | 52% | | | 28% | | | | | | | | | | | | 20% | | | | | | | | |

Competitors for

As of December 31, 2023, we held patents with expiration dates ranging from 2024 to 2043.

We have a goal to achieve net zero emissions by 2040, and we are currently formulating the strategy and taking initial steps towards the achievement.

We

Information about Our Executive Officers

Mr. Trent has held several leadership roles throughout his career.

In October 2020, he was named Senior Vice President and General Manager, ISG of onsemi,

*Sudhir Gopalswamy*.

Prior to April 2023 when he was appointed to lead ASG, Mr. Gopalswamy was the Chief Strategy Officer driving our corporate strategy development, annual strategic planning cycle and other key initiatives.

Before joining onsemi, he served as Principal at Shamago Advisors from March 2021 to March 2022.

Mr. Gopalswamy worked at Cypress from 2008 until its 2020 acquisition by Infineon.

Following that acquisition, Mr. Gopalswamy was appointed Executive Vice President and Board Member of the Connected Secure Systems Division of Infineon and served in that role until March 2021.

Before joining Cypress in 2008, he held leadership positions with ever-increasing scope at Intel and Conexant Systems, Inc. Mr. Gopalswamy holds a Bachelor of Science in Electrical Engineering from Purdue University, as well as a Master in Business Administration from Duke University, and he has also attended Stanford Directors’ College at Stanford University.

Additionally, we serve a broad base of end-user markets, which include communications, computing and consumer.

We are focused on achieving efficiencies in our operating and capital expenditures.

Additionally, we continue to rationalize our product portfolio by moving away from non-differentiated, non-strategic products, which in most cases had lower gross and operating margins.

To this effect, in September 2022, we approved an exit plan to wind down QCS, which will further enable us to direct our investments to areas of strategic focus.

During 2022, we completed the divestitures of certain manufacturing facilities.

We believe these actions, among others, will allow us to transition from sub-scale factories into a lighter internal fabrication model where our financial performance will be less volatile and not as heavily influenced by our internal manufacturing volumes.

We will continue to evaluate our manufacturing footprint in 2023 to align with our investment priorities and corporate strategy.

Our goal is to reduce volatility in our gross margins and maximize return on our manufacturing investments with the intention of having our product strategy drive our manufacturing footprint and capital investments.

Recent Acquisitions

$406.3 million.

In addition, in 2019 we paid GFUS a one-time license fee of $30.0 million for certain technology, which has been recognized as an intangible asset subject to amortization.

The transaction has been accounted for as a business combination.

We believe the acquisition of GTAT will act as a building block to fuel growth and secure supply of SiC to meet growing customer demand for SiC-based solutions.

Completed Divestitures of Certain Manufacturing Facilities

New Legislation

In August 2022, the Creating Helpful Incentives to Produce Semiconductors and Science Act, H.R. 4346 (the "CHIPS Act") and the Inflation Reduction Act, H.R. 5376 (the "IR Act") were signed into law.

Among other things, the CHIPS Act provides various incentives and tax credits to United States companies for research, development, manufacturing and workforce development in domestic semiconductor manufacturing.

The IR Act introduces a 15% corporate alternative minimum tax ("CAMT") for certain corporations and a 1% excise tax on certain stock repurchases.

The Company is evaluating the provisions of the new laws and the potential impacts to the Company.

| 2022 Revenue (%) | | | 50.5% | | | | | | 34.1% | | | | | | 15.3% | | | | | |

Our product solutions enable industry leading active mode and standby mode efficiency now demanded by regulatory agencies around the world.

Additionally, ASG offers trusted foundry and design services for our government customers, which leverages our broad range of manufacturing, IC design, packaging, and silicon technology offerings to provide turn-key solutions for our customers.

| 2022 Revenue (%) | | | 40.4% | | | 27.5% | | | | | | | | | | | | 32.1% | | | | | | | | |

the world to be instantaneously available throughout all other regions.

Historically, a significant portion of our backlog was cancellable, however, our current agreements, including orders subject to minimum purchase commitments under our longer-term supply arrangements, are not subject to cancellation, unless otherwise mutually agreed.

In October 2022, we ceased operations at our design locations in Australia and Russia as part of the exit plan to wind down QCS.

As of December 31, 2022, we held patents with expiration dates ranging from 2023 to 2043, and none of the patents that expire in the next three years are expected to materially affect our business.

Our 2022 results were positively influenced by macroeconomic factors including a better-than-expected demand and recovery from the COVID-19 pandemic along with our efforts focused on price increases, better utilization, product diversification and content gains.

In that regard, onsemi has committed to achieving net zero emissions by 2040.

The disclosed headcount information does not include the addition of approximately 1,050 full-time employees who joined the Company as part of the EFK acquisition, which was completed on December 31, 2022, as their employment with onsemi was not effective until January 1, 2023.

For additional information, see Note 5: ''Acquisitions and Divestitures'' in the notes to our audited consolidated financial statements included elsewhere in this Form 10-K.

Executive Officers of the Registrant

Additionally, Mr. El-Khoury currently serves as a member of the board of directors at Sakuu Corporation.

*Robert Tong*.

Having joined onsemi through its acquisition of AMI Semiconductor, Inc., Mr. Tong has held a number of

management positions within onsemi.

Prior to Mr. Tong’s promotion to his current role on June 1, 2022, he was Senior Vice President of the Mobile, Computing and Cloud Division.

Prior to AMI Semiconductor, he served as president and chief executive officer of Dspfactory, a fabless semiconductor startup of DSP products for the hearing health industry.

A fellow of the Canadian Academy of Engineering, Mr. Tong serves on the advisory board for the Dean of Engineering at McMaster University.

He holds a Bachelor of Engineering degree in electrical and electronics engineering from McMaster University, as well as a Master of Business Administration from Wilfrid Laurier University and a Master of Applied Science in electrical and electronics engineering from the University of Waterloo.

See Note 13: ''Commitments and Contingencies'' under the heading "Legal Matters" in the notes to our audited consolidated financial statements included elsewhere in this Form 10-K for a description of [removed: legal proceedings and related matters.]

The Company has elected to use a $1 million threshold for disclosing certain proceedings arising under federal, state or local environmental laws when a governmental authority is a party.

The Company believes proceedings under this threshold are not material to its business and financial condition.

legal proceedings and related matters.

For the fiscal year ended December 31, [removed: 2022][added: 2023]

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant was [removed: $20,262,351,285] [added: $40,710,818,329] as of [removed: July 1, 2022,] [added: June 30, 2023,] based on the closing sales price of such stock on the Nasdaq Global Select Market.

The number of shares of the registrant's common stock outstanding at [removed: February 1, 2023] [added: January 31, 2024] was [removed: 431,967,907.][added: 427,328,652.]

Portions of the registrant's Definitive Proxy Statement relating to its [removed: 2023] [added: 2024] Annual Meeting of Stockholders, which is expected to be filed pursuant to Regulation 14A within 120 days after the registrant's fiscal year ended December 31, [removed: 2022,] [added: 2023,] are incorporated by reference into Part III of this Form 10-K.

| *Item 1.* | | | Business | | | [removed: [5](#i1f16fae4437642b38a7fb1c28a8193e9_16)] [added: [5](#i355d5438e9c94e47b7087167c6b43520_16)] | | |

| | | | Revenue Generating Activities | | | [removed: [6](#i1f16fae4437642b38a7fb1c28a8193e9_22)] [added: [6](#i355d5438e9c94e47b7087167c6b43520_22)] | | |

| | | | Government Regulation | | | [removed: [12](#i1f16fae4437642b38a7fb1c28a8193e9_34)] [added: [12](#i355d5438e9c94e47b7087167c6b43520_34)] | | |

| | | | Environmental, Social and Governance Initiatives | | | [removed: [13](#i1f16fae4437642b38a7fb1c28a8193e9_37)] [added: [13](#i355d5438e9c94e47b7087167c6b43520_37)] | | |

| | | | Human Capital Resources | | | [removed: [13](#i1f16fae4437642b38a7fb1c28a8193e9_40)] [added: [13](#i355d5438e9c94e47b7087167c6b43520_40)] | | |

| | | | Available Information | | | [removed: [16](#i1f16fae4437642b38a7fb1c28a8193e9_46)] [added: [15](#i355d5438e9c94e47b7087167c6b43520_46)] | | |

| *Item 1A.* | | | Risk Factors | | | [removed: [16](#i1f16fae4437642b38a7fb1c28a8193e9_49)] [added: [15](#i355d5438e9c94e47b7087167c6b43520_49)] | | |

| *Item 1B.* | | | Unresolved Staff Comments | | | [removed: [29](#i1f16fae4437642b38a7fb1c28a8193e9_52)] [added: [28](#i355d5438e9c94e47b7087167c6b43520_52)] | | |

| *Item 2.* | | | Properties | | | [removed: [29](#i1f16fae4437642b38a7fb1c28a8193e9_55)] [added: [30](#i355d5438e9c94e47b7087167c6b43520_55)] | | |

| *Item 3.* | | | Legal Proceedings | | | [removed: [29](#i1f16fae4437642b38a7fb1c28a8193e9_58)] [added: [30](#i355d5438e9c94e47b7087167c6b43520_58)] | | |

| *Item 4.* | | | Mine Safety Disclosure | | | [removed: [29](#i1f16fae4437642b38a7fb1c28a8193e9_61)] [added: [31](#i355d5438e9c94e47b7087167c6b43520_61)] | | |

| *Item 5.* | | | Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | | | [removed: [29](#i1f16fae4437642b38a7fb1c28a8193e9_67)] [added: [31](#i355d5438e9c94e47b7087167c6b43520_67)] | | |

| *Item 6.* | | | \[Reserved\] | | | [removed: [31](#i1f16fae4437642b38a7fb1c28a8193e9_70)] [added: [32](#i355d5438e9c94e47b7087167c6b43520_70)] | | |

| *Item 7.* | | | Management's Discussion and Analysis of Financial Condition and Results of Operations | | | [removed: [31](#i1f16fae4437642b38a7fb1c28a8193e9_73)] [added: [32](#i355d5438e9c94e47b7087167c6b43520_73)] | | |

| *Item 7A.* | | | Quantitative and Qualitative Disclosures about Market Risk | | | [removed: [41](#i1f16fae4437642b38a7fb1c28a8193e9_94)] [added: [43](#i355d5438e9c94e47b7087167c6b43520_94)] | | |

| *Item 8.* | | | Financial Statements and Supplementary Data | | | [removed: [42](#i1f16fae4437642b38a7fb1c28a8193e9_97)] [added: [43](#i355d5438e9c94e47b7087167c6b43520_97)] | | |

| *Item 9.* | | | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | | | [removed: [42](#i1f16fae4437642b38a7fb1c28a8193e9_100)] [added: [44](#i355d5438e9c94e47b7087167c6b43520_100)] | | |

| *Item 9A.* | | | Controls and Procedures | | | [removed: [42](#i1f16fae4437642b38a7fb1c28a8193e9_103)] [added: [44](#i355d5438e9c94e47b7087167c6b43520_103)] | | |

| *Item 9B.* | | | Other Information | | | [removed: [43](#i1f16fae4437642b38a7fb1c28a8193e9_106)] [added: [44](#i355d5438e9c94e47b7087167c6b43520_106)] | | |

| *Item 9C.* | | | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | | | [removed: [43](#i1f16fae4437642b38a7fb1c28a8193e9_109)] [added: [45](#i355d5438e9c94e47b7087167c6b43520_109)] | | |

| *Item 10.* | | | Directors, Executive Officers and Corporate Governance | | | [removed: [43](#i1f16fae4437642b38a7fb1c28a8193e9_115)] [added: [45](#i355d5438e9c94e47b7087167c6b43520_115)] | | |

| *Item 11.* | | | Executive Compensation | | | [removed: [43](#i1f16fae4437642b38a7fb1c28a8193e9_118)] [added: [45](#i355d5438e9c94e47b7087167c6b43520_118)] | | |

| *Item 12.* | | | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | | | [removed: [44](#i1f16fae4437642b38a7fb1c28a8193e9_121)] [added: [45](#i355d5438e9c94e47b7087167c6b43520_121)] | | |

| *Item 13.* | | | Certain Relationships and Related Transactions, and Director Independence | | | [removed: [44](#i1f16fae4437642b38a7fb1c28a8193e9_124)] [added: [45](#i355d5438e9c94e47b7087167c6b43520_124)] | | |

| *Item 14.* | | | Principal Accountant Fees and Services | | | [removed: [44](#i1f16fae4437642b38a7fb1c28a8193e9_127)] [added: [45](#i355d5438e9c94e47b7087167c6b43520_127)] | | |

| *Item 15.* | | | Exhibits and Financial Statement Schedules | | | [removed: [44](#i1f16fae4437642b38a7fb1c28a8193e9_133)] [added: [45](#i355d5438e9c94e47b7087167c6b43520_133)] | | |

| *Item 16.* | | | Form 10-K Summary | | | [removed: [50](#i1f16fae4437642b38a7fb1c28a8193e9_139)] [added: [53](#i355d5438e9c94e47b7087167c6b43520_139)] | | |

| Signatures | | | | | | [removed: [51](#i1f16fae4437642b38a7fb1c28a8193e9_142)] [added: [54](#i355d5438e9c94e47b7087167c6b43520_142)] | | |

| [removed: 1.00%] [added: 0.50%] Notes | | | | | | [removed: 1.00%] [added: 0.50%] Convertible Senior Notes due [removed: 2020] [added: 2029] | | |

| [removed: Amended] [added: Prior] Credit Agreement | | | | | | Credit [removed: Agreement,] [added: agreement,] dated as of April 15, 2016, as subsequently amended, by and among the Company, as borrower, the several lenders party thereto, Deutsche Bank AG, New York Branch, as administrative agent and collateral agent, and certain other parties, providing for the [removed: Revolving Credit Facility] [added: Revolver due 2024] and the Term Loan "B" [removed: Facility] [added: Facility, that was terminated on June 22, 2023 and replaced by the New Credit Agreement.] | | |

| Revolving Credit Facility | | | | | | A [removed: $1.97] [added: $1.5] billion revolving credit facility created pursuant to the [removed: Amended] [added: New] Credit Agreement | | |

| Term Loan "B" Facility | | | | | | A $2.4 billion term loan "B" facility created pursuant to the [removed: Amended] [added: Prior] Credit Agreement | | |

5701 N.

Pima Road

Scottsdale, AZ 85250

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).

| | | | Overview | | | [5](#i355d5438e9c94e47b7087167c6b43520_19) | | |

| | | | Markets | | | [8](#i355d5438e9c94e47b7087167c6b43520_25) | | |

| | | | Resources | | | [10](#i355d5438e9c94e47b7087167c6b43520_28) | | |

| | | | Seasonality | | | [12](#i355d5438e9c94e47b7087167c6b43520_31) | | |

| | | | Information about Our Executive Officers | | | [14](#i355d5438e9c94e47b7087167c6b43520_43) | | |

| *Item 1C.* | | | Cybersecurity | | | [28](#i355d5438e9c94e47b7087167c6b43520_2180) | | |

| EFK | | | | | | East Fishkill, New York fabrication facility | | |

| Fairchild | | | | | | Fairchild Semiconductor International LLC, a wholly-owned subsidiary of ON Semiconductor Corporation | | |

| 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 | | |

| Revolver due 2024 | | | | | | A $1.97 billion revolving credit facility created pursuant to the Prior Credit Agreement | | |

| ROU | | | | | | Right-of-use | | |

| | | | | | | | | |

5005 E.

McDowell Road

Phoenix, AZ 85008

| | | | Overview | | | [5](#i1f16fae4437642b38a7fb1c28a8193e9_19) | | |

| | | | Markets | | | [8](#i1f16fae4437642b38a7fb1c28a8193e9_25) | | |

| | | | Resources | | | [10](#i1f16fae4437642b38a7fb1c28a8193e9_28) | | |

| | | | Seasonality | | | [12](#i1f16fae4437642b38a7fb1c28a8193e9_31) | | |

| | | | Executive Officers of the Registrant | | | [14](#i1f16fae4437642b38a7fb1c28a8193e9_43) | | |

| ASSP | | | | | | Application specific standard product | | |

| BEPS | | | | | | Base Erosion and Profit Shifting | | |

| EDI | | | | | | Electronic data interface | | |

| Fairchild | | | | | | Fairchild Semiconductor International Inc., a wholly-owned subsidiary of ON Semiconductor Corporation. In April 2022, this entity was converted into a limited liability company (Fairchild Semiconductor International, LLC). | | |

| Freescale | | | | | | Freescale Semiconductor, Inc. | | |

| Motorola | | | | | | Motorola Inc. | | |

| RF | | | | | | Radio frequency | | |

Risk Management and Strategy

The secure processing, maintenance and transmission of sensitive data, including confidential and other proprietary information about our business and our employees, customers, suppliers and business partners, is important to our operations and business strategy.

As a result, cybersecurity and data protection are key components of our long-term strategy.

We use various processes to inform our assessment, identification and management of risk from cybersecurity threats.

Key areas of our cybersecurity risk management processes and strategy currently include:

- *Cross-Functional Collaboration and Coordination*.

Our Enterprise Cybersecurity Services (“ECS”) team, led by our Chief Information Security Officer (“CISO”), has first line responsibility for our cybersecurity risk management processes.

However, the ECS team works in partnership with other internal teams to coordinate efforts, priorities and oversight.

These include:

◦our Cybersecurity Executive Council (the “Council”), which is composed of key leaders from stakeholder groups throughout the Company, including the CISO and certain members of senior management;

◦our Enterprise Risk Management (“ERM”) team, which is responsible for evaluating and assessing overall enterprise risk, including cybersecurity risk, and advising senior management and the Board regarding our overall risk profile and priorities as they evolve;

◦our Internal Audit Department (“IAD”), which monitors certain IT systems controls that are integrated into our larger Sarbanes-Oxley control environment; and

◦our Cyber Incident Response Team (“CIRT”), a cross-functional team of subject matter experts from across the Company and certain third-party support providers that we have on retainer.

- *Ongoing Evaluation and Assessment of Systems and Processes*.

We update our information security management system from time to time as appropriate and we employ standards and frameworks as we deem necessary to assist us in monitoring compliance with regulatory, industry and evolving data privacy requirements.

In addition to periodic in-depth evaluations of our systems and processes, we monitor our IT systems and processes on an ongoing basis with the goal of identifying and remediating real and potential threats as they arise.

We adjust our systems, procedures and policies regularly as we deem necessary in response to identified threats and risks.

- *Security Awareness Program to Train and Test Personnel*.

We sponsor a multi-faceted security awareness program that includes regular, mandatory trainings for our personnel on data protection and malware detection, policy and process awareness, periodic phishing simulations and other kinds of preparedness testing.

- *Cyber Incident Response Plan*.

We maintain a cross-functional cyber incident response plan with defined roles, responsibilities and reporting protocols.

This plan, which we evaluate and test on a regular basis, focuses on responding to and recovering from any significant breach as well as mitigating any impact to our business.

Generally, when a breach or suspected breach is identified, the ECS team would escalate the issue to the Council for initial analysis and guidance.

In the event of a significant breach, the CIRT, overseen by the Council, would typically be tasked with preparing an initial response.

The Council (in consultation with, among others, the CIRT) would be responsible for determining whether a particular incident (alone or in combination with other factors) triggers any reporting or notification responsibilities.

- *Regular Evaluation of Initiatives, Results and Priorities*.

The ECS team, in consultation with the Council and other members of senior management, updates its strategy at least annually to account for changes in our business strategy, legal and regulatory developments across our geographic footprint, the results of our recent ECS initiatives, and further developments in the cybersecurity threat landscape.

In addition, we periodically engage a third-party provider to conduct an external assessment of our security program.

The results of this assessment, which are reported to the Audit Committee (and the Board, as appropriate), assist us in determining whether any further changes to our existing policies and practices are warranted.

We expect that our cybersecurity risk management processes and strategy will continue to evolve as the cybersecurity threat landscape evolves.

As indicated above, we engage third-party providers to assist us with our cybersecurity risk management and strategy.

Some of these providers provide us with ongoing assistance (such as threat monitoring, mitigation strategies, updates on emerging trends and developments and policy guidance) while we engage others to provide targeted assistance (such as security and forensic expertise) as needed.

Prior to exchanging any sensitive data or integrating with any key third-party provider, we assess their security fitness against our risk posture and request changes as we deem necessary.

As of December 31, 2023, we have not identified any risks from cybersecurity threats (including any previous cybersecurity incidents) that have materially affected the Company, our business strategy, our results of operations or our financial condition.

For a discussion of risks from cybersecurity threats that could be reasonably likely to materially affect us, please see our Risk Factors discussion under the heading, “Trends, Risks and Uncertainties Related to Technology and Data Privacy” in this Form 10-K.

Governance

Consistent with our overall risk management governance structure, management is responsible for the day-to-day management of cybersecurity risk while our Board and its Audit Committee play an active, ongoing oversight role.

*Board Oversight*.

Our Board has delegated to its Audit Committee specific, first-line responsibility for overseeing major cybersecurity risk exposures in addition to our broader ERM program.

Specifically, under its charter, the Audit Committee is responsible for overseeing our cybersecurity posture, risk assessment, strategy and mitigation and for making recommendations to address and resolve any breaches or issues related to the protection or privacy of our data.

Our corporate headquarters, as well as certain design center and research and development operations, are located in approximately [removed: 600,000] [added: 200,000] square feet of building space on property that we lease in [removed: Phoenix,] [added: Scottsdale,] Arizona.

See [removed: "Business—Resources"] [added: "Business-Resources"] included elsewhere in this Form 10-K for further details on our properties and "Business-Governmental Regulation" for further details on environmental regulation of our properties.

We also lease two research and development facilities, one located in Australia and one located in Russia, and the Company is in the process of terminating these two leases as part of the exit plan to wind down QCS.

We believe that our facilities around the world, whether owned or leased, are well-maintained.

As of [removed: February 1, 2023,] [added: January 31, 2024,] there were approximately [removed: 182] [added: 174] holders of record of our common stock and [removed: 431,967,907] [added: 427,328,652] shares of common stock outstanding.

The following graph shows a comparison of the five-year cumulative total stockholder return for onsemi, the PHLX Semiconductor Sector Index (SOX), [added: and] the Standard and Poor's 500 (S&P [removed: 500), and the NASDAQ Composite Index.][added: 500).]

The comparison assumes $100 was invested on December 31, [removed: 2017] [added: 2018] in shares of our common stock and in each of the indices shown [added: and assumes that all of the dividends were reinvested.]

[removed: ][added: ]

Our outstanding debt facilities may limit the amount of dividends we are permitted to pay and the amount of shares we are permitted to buy back under the Share Repurchase Program (as defined [removed: below), or any new share repurchase programs adopted by the Company.][added: below).]

We may pay dividends and buy back shares under the Share Repurchase Program in an unlimited amount so long as, after giving effect thereto, the consolidated total net leverage ratio (calculated in accordance with our [removed: Amended] [added: New] Credit Agreement) does not exceed [removed: 2.50] [added: 2.75] to 1.00.

[removed: In addition,] [added: Additionally, under a different provision,] so long as no default has occurred and is continuing or results therefrom, our [removed: Amended] [added: New] Credit Agreement permits us to pay cash dividends to our common stockholders, buy back shares under the Share Repurchase Program, or a combination thereof, in an amount up to [removed: $100.0] [added: $350.0] million per year.

See Note 9: ''Long-Term Debt'' in the notes to the audited consolidated financial statements included elsewhere in this Form 10-K for further discussion of our [removed: Amended] [added: New] Credit Agreement.

The following table provides information regarding repurchases of our common stock during the quarter ended December 31, [removed: 2022:][added: 2023:]

(1)The periods represent our fiscal month start and end dates for the fourth quarter of [removed: 2022.][added: 2023.]

(2)Included above is an aggregate of [removed: 617,232] [added: 4,470,217] shares that were received pursuant to bond hedges for which no cash was [added: exchanged.]

The repurchases under the Share Repurchase Program amounted to [removed: $259.8] [added: $564.0] million during the year ended December 31, [removed: 2022.][added: 2023.]

There were [removed: no] [added: $259.8 million and $0 in] repurchases of common stock under the [removed: Share Repurchase Program] [added: previous share repurchase program] during the [removed: year] [added: years] ended December 31, [removed: 2021] [added: 2022] and [removed: $65.3 million in repurchases of common stock under the Share Repurchase Program during the year ended] December 31, [removed: 2020.][added: 2021, respectively.]

[removed: The Share] [added: In February 2023, the Board of Directors approved a share repurchase program (the “Share] Repurchase [removed: Program allowed] [added: Program”), which allows] for the repurchase of our common stock from time to time [added: through a variety of methods, including] in privately negotiated transactions or open market transactions, [removed: including] [added: such as] pursuant to a trading plan in accordance with Rule 10b5-1 and Rule 10b-18 of the Exchange [removed: Act,] [added: Act] or [removed: by any] [added: a] combination of [removed: such methods or other] methods.

The [removed: Share Repurchase Program,] [added: previous share repurchase program,] which did not require us to purchase any particular amount of common stock [removed: and was subject to the discretion of the Board of Directors,] expired on December 31, 2022, with approximately $1,036.0 million remaining unutilized.

The [removed: 2023] Share Repurchase Program, which does not require us to purchase any minimum amount of our common stock, has an aggregate limit of $3.0 billion from February 8, 2023 through December 31, 2025 (exclusive of fees, commissions and other expenses).

| September 30, 2023 - October 27, 2023 | | | | | | 4,470,107 | | | | | | $ | 94.40 | | | | | — | | | | | | $ | 2,736.0 | |

| October 28, 2023 - November 24, 2023 | | | | | | 4,490,278 | | | | | | 66.83 | | | | | | 4,490,168 | | | | | | 2,436.0 | | |

| November 25, 2023 - December 31, 2023 | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,436.0 | | |

| Total | | | | | | 8,960,385 | | | | | | 80.58 | | | | | | 4,490,168 | | | | | | | | |

(4)Represents the authorized amount remaining under the Share Repurchase Program (as defined below) announced on February 6, 2023 to repurchase up to $3.0 billion of shares of our common stock through December 31, 2025.

and assumes that all of the dividends were reinvested.

| October 1, 2022 - October 28, 2022 | | | | | | — | | | | | | $ | — | | | | | — | | | | | | $ | 1,126.1 | |

| October 29, 2022 - November 25, 2022 | | | | | | 1,147,852 | | | | | | 70.45 | | | | | | 589,826 | | | | | | 1,084.7 | | |

| November 26, 2022 - December 31, 2022 | | | | | | 761,833 | | | | | | 68.93 | | | | | | 702,627 | | | | | | 1,036.1 | | |

| Total | | | | | | 1,909,685 | | | | | | 69.84 | | | | | | 1,292,453 | | | | | | | | |

exchanged.

(4)Represents the authorized amount remaining under the Share Repurchase Program.

In February 2023, the Board of Directors approved a new share repurchase program (the “2023 Share Repurchase Program”), which allows for the repurchase of our common stock from time to time in privately negotiated transactions or open market transactions, including pursuant to a trading plan in accordance with Rule 10b5-1 and Rule 10b-18 of the Exchange Act, or by any combination of such methods or other methods.

Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered in this Form 10-K, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions [added: regarding required disclosure.]

We also carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the fiscal quarter ended December 31, [removed: 2022.][added: 2023.]

There have been no changes to our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the fiscal quarter ended December 31, [removed: 2022 which] [added: 2023 that] have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, [removed: 2022.][added: 2023.]

Based on this assessment, management has concluded that our internal control over financial reporting was effective as of December 31, [removed: 2022.][added: 2023.]

The effectiveness of our internal control over financial reporting as of December 31, [removed: 2022] [added: 2023] has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears in "Exhibits and Financial Statement Schedules" of this Form 10-K.

regarding required disclosure.

Management's assessment of the effectiveness of internal control over financial reporting as of December 31, 2022 excluded the East Fishkill, New York site and fabrication facility ("EFK"), which was acquired in a purchase business combination by the Company on December 31, 2022.

EFK's total assets and total revenue excluded from management’s assessment represent 3.4% and 0%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2022.

*Insider Trading Arrangements*

During the quarter ended December 31, 2023, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" (as those terms are defined in Item 408 of Regulation S-K), except as follows:

Sudhir Gopalswamy, Senior Vice President and General Manager, ASG, adopted a Rule 10b5-1 trading arrangement on

December 15, 2023.

Under this arrangement, a total of 8,537 shares of our common stock may be sold, subject to certain conditions, before the plan expires on December 13, 2024.

The above arrangement is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act.

None.

The information under the heading [removed: "Executive Officers of the Registrant"] [added: "Information about Our Executive Officers"] in this Form 10-K is incorporated by reference into this section.

Information concerning directors and persons nominated to become directors and executive officers is incorporated by reference from the text under the captions [removed: "Management Proposals—Proposal No. 1: Election of Directors,"] "The Board of Directors and Corporate [removed: Governance,"] [added: Governance"] and "Miscellaneous [removed: Information—Stockholder Nominations and Proposals"] [added: Information"] in our Proxy Statement to be filed pursuant to Regulation 14A within 120 days after our fiscal year ended December 31, [removed: 2022] [added: 2023] in connection with our [removed: 2023] [added: 2024] Annual Meeting of Stockholders ("Proxy Statement").

Information concerning our Code of Business Conduct is incorporated by reference from the text under the caption "The Board of Directors and Corporate [removed: Governance—Code of Business Conduct"] [added: Governance"] in our Proxy Statement.

Information concerning executive compensation is incorporated by reference from the text under the captions "The Board of Directors and Corporate [removed: Governance—2022] [added: Governance—2023] Compensation of [removed: Directors,"] [added: Directors" and] "Compensation of Executive [removed: Officers," "Compensation Committee Report," "Compensation Discussion and Analysis," "onsemi 2022 Pay Ratio Disclosure," "2022 Pay versus Performance" and "Human Capital and Compensation Committee Interlocks and Insider Participation"] [added: Officers"] in our Proxy Statement.

Information concerning security ownership of certain beneficial owners and management is incorporated by reference from the text under the captions "Principal Stockholders," "Share Ownership of Directors and [added: Executive] Officers" and [removed: "Share-Based] [added: "Equity] Compensation Plan Information" in our Proxy Statement.

Information concerning certain relationships and related transactions involving us and certain others is incorporated by reference from the text under the [removed: captions "Management Proposals—Proposal No. 1: Election of Directors,"] [added: caption] "The Board of Directors and Corporate [removed: Governance," and "Related Party Transactions"] [added: Governance"] in our Proxy Statement.

Information concerning principal accounting fees and services is incorporated by reference from the text under the caption [removed: "Management Proposals — Proposal No. 4: Ratification of Selection of Independent Registered Public Accounting Firm"] [added: "Audit Committee Matters"] in our Proxy Statement.

| Report of Independent Registered Public Accounting Firm (PCAOB ID 238) | | | [removed: [52](#i1f16fae4437642b38a7fb1c28a8193e9_145)] [added: [55](#i355d5438e9c94e47b7087167c6b43520_145)] | | |

| Consolidated Balance Sheets as of December 31, [removed: 2022] [added: 2023] and [removed: 2021] [added: 2022] | | | [removed: [54](#i1f16fae4437642b38a7fb1c28a8193e9_151)] [added: [57](#i355d5438e9c94e47b7087167c6b43520_151)] | | |

| Consolidated Statements of Operations and Comprehensive Income for the years ended December 31, [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020] [added: 2021] | | | [removed: [55](#i1f16fae4437642b38a7fb1c28a8193e9_154)] [added: [58](#i355d5438e9c94e47b7087167c6b43520_154)] | | |

| Consolidated Statements of Stockholders' Equity for the years ended December 31, [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020] [added: 2021] | | | [removed: [56](#i1f16fae4437642b38a7fb1c28a8193e9_157)] [added: [59](#i355d5438e9c94e47b7087167c6b43520_157)] | | |

| Consolidated Statements of Cash Flows for the years ended December 31, [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020] [added: 2021] | | | [removed: [57](#i1f16fae4437642b38a7fb1c28a8193e9_160)] [added: [61](#i355d5438e9c94e47b7087167c6b43520_160)] | | |

| Notes to Consolidated Financial Statements | | | [removed: [58](#i1f16fae4437642b38a7fb1c28a8193e9_163)] [added: [62](#i355d5438e9c94e47b7087167c6b43520_163)] | | |

| Schedule II - Valuation and Qualifying Accounts for the years ended December 31, [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020] [added: 2021] | | | [removed: [99](#i1f16fae4437642b38a7fb1c28a8193e9_232)] [added: [101](#i355d5438e9c94e47b7087167c6b43520_232)] | | |

| 2.2 | | | | | | [Agreement and Plan of Merger, dated [removed: March 27, 2019,] [added: August 25, 2021,] by and among [removed: Quantenna Communications, Inc.,] ON Semiconductor [removed: Corporation and Raptor Operations] [added: Corporation, Semiconductor Components Industries, LLC, Terra Merger] Sub, [added: Inc., GT Advanced Technologies] Inc. [added: and Pirinate Consulting Group 2, LLC, as equityholder representative] (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Commission on [removed: March 27, 2019)†](http://www.sec.gov/Archives/edgar/data/1097864/000119312519088528/d929418dex21.htm)] [added: August 25, 2021)†](http://www.sec.gov/Archives/edgar/data/0001097864/000119312521256288/d196596dex21.htm)] | | | | | |

| [removed: 4.5] [added: 4.6] | | | | | | [Description of the Registrant’s Securities Registered under Section 12 of the Securities Exchange Act of 1934, as [removed: amended(1)](https://www.sec.gov/Archives/edgar/data/1097864/000162828023002350/exhibit45descriptionofsecu.htm)] [added: amended(incorporated by reference to Exhibit 4.5 to the Company’s Annual Report on Form 10-K filed with the Commission on February 6, 2023)](http://www.sec.gov/Archives/edgar/data/1097864/000162828023002350/exhibit45descriptionofsecu.htm)] | | | | | |

| 10.5(s) | | | | | | [Tenth Amendment to Credit Agreement, dated as of November 16, 2022, by and among ON Semiconductor Corporation, as borrower, the subsidiary guarantors party thereto, Deutsche Bank AG New York Branch, as administrative agent and collateral agent, and certain Lenders party thereto constituting the Required [removed: lenders(1)](https://www.sec.gov/Archives/edgar/data/1097864/000162828023002350/ex105s-tenthamendmenttocre.htm)] [added: lenders](http://www.sec.gov/Archives/edgar/data/1097864/000162828023002350/ex105s-tenthamendmenttocre.htm)[(inc](http://www.sec.gov/Archives/edgar/data/1097864/000162828023002350/ex105s-tenthamendmenttocre.htm)[orporated by reference to Exhibit 10.5(s) to the Company's Annual Report on Form 10-K filed with the Commission on February 6, 2023](http://www.sec.gov/Archives/edgar/data/1097864/000162828023002350/ex105s-tenthamendmenttocre.htm)[)](http://www.sec.gov/Archives/edgar/data/1097864/000162828023002350/ex105s-tenthamendmenttocre.htm)] | | | | | |

| [removed: 10.7(b)] [added: 10.7(k)] | | | | | | [removed: [Restricted] [added: [Form of Restricted] Stock [removed: Units] Award Agreement [added: for Directors] under the ON Semiconductor Corporation Amended and Restated Stock Incentive Plan [removed: (2019] [added: (2022] form [removed: agreement for Section 16 Officers)] [added: agreement)] (incorporated by reference to Exhibit 10.1 to the Company’s [removed: Current] [added: Quarterly] Report on Form [removed: 8-K] [added: 10-Q] filed with the Commission on [removed: February 19, 2019)(2)](http://www.sec.gov/Archives/edgar/data/1097864/000119312519044289/d708156dex101.htm)] [added: August 1, 2022)(2)](https://www.sec.gov/Archives/edgar/data/1097864/000162828022019900/exhibit101-2022rsaagreemen.htm)] | | | | | |

| [removed: 10.7(c)] [added: 10.7(h)] | | | | | | [removed: [2020 Form of Performance-Based] [added: [Performance-Based] Restricted Stock Units Award [removed: for Senior Vice Presidents and Above (Upside)] [added: Agreement] under the ON Semiconductor Corporation Amended and Restated Stock Incentive Plan [added: for Hassane S. El-Khoury, dated December 7, 2020] (incorporated by reference to Exhibit [removed: 10.1] [added: 10.7(s)] to the [removed: Company’s Current] [added: Company's Annual] Report on Form [removed: 8-K/A] [added: 10-K] filed with the Commission on [removed: March 5, 2020)(2)](http://www.sec.gov/Archives/edgar/data/1097864/000119312520062011/d833568dex101.htm)] [added: February 16, 2021)(2)](http://www.sec.gov/Archives/edgar/data/0001097864/000162828021002219/exhibit107sonpbrsuawardagr.htm)] | | | | | |

| [removed: 10.7(d)] [added: 10.7(b)] | | | | | | [Restricted Stock Units Award Agreement under the ON Semiconductor Amended and Restated Stock Incentive Plan (2021 form agreement for Senior Employee Group) (incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on May 3, 2021)(2)](http://www.sec.gov/Archives/edgar/data/0001097864/000162828021008547/exhibit1042021formofonrsua.htm) | | | | | |

| [removed: 10.7(e)] [added: 10.7(c)] | | | | | | [Performance-Based Restricted Stock Units Award Agreement under the ON Semiconductor Amended and Restated Stock Incentive Plan (2021 form agreement for Tier I Employees) (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on May 3, 2021)(2)](http://www.sec.gov/Archives/edgar/data/0001097864/000162828021008547/exhibit103thadtrentpbrsuaw.htm) | | | | | |

| [removed: 10.7(f)] [added: 10.7(d)] | | | | | | [Form of Annual Restricted Stock Unit Award Agreement under the ON Semiconductor Corporation Amended and Restated Stock Incentive Plan [removed: (2022 form agreement)] [added: (2022](https://www.sec.gov/Archives/edgar/data/1097864/000162828022011616/exhibit1012022formrsuaward.htm) [and 2023](https://www.sec.gov/Archives/edgar/data/1097864/000162828022011616/exhibit1012022formrsuaward.htm)[)] (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on May 2, 2022)(2)](https://www.sec.gov/Archives/edgar/data/1097864/000162828022011616/exhibit1012022formrsuaward.htm) | | | | | |

| [removed: 10.7(g)] [added: 10.7(e)] | | | | | | [Form of Annual Performance-Based Restricted Stock Unit Award Agreement under the ON Semiconductor Corporation Amended and Restated Stock Incentive Plan (2022 form agreement) (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on May 2, 2022)(2)](https://www.sec.gov/Archives/edgar/data/1097864/000162828022011616/exhibit102formofannualpbrs.htm) | | | | | |

| [removed: 10.7(h)] [added: 10.7(g)] | | | | | | [Restricted Stock Units Award Agreement under the ON Semiconductor Corporation Amended and Restated Stock Incentive Plan for Hassane S. El-Khoury, dated December 7, 2020 (incorporated by reference to Exhibit 10.7(r) to the Company's Annual Report on Form 10-K filed with the Commission on February 16, 2021)(2)](http://www.sec.gov/Archives/edgar/data/0001097864/000162828021002219/exhibit107ronrsuawardagree.htm) | | | | | |

| [removed: 10.7(i)] [added: 10.7(j)] | | | | | | [Performance-Based Restricted Stock Units Award Agreement under the ON Semiconductor Corporation Amended and Restated Stock Incentive Plan for [removed: Hassane S. El-Khoury,] [added: Thad Trent,] dated [removed: December 7, 2020] [added: February 16, 2021] (incorporated by reference to Exhibit [removed: 10.7(s)] [added: 10.3] to the [removed: Company's Annual] [added: Company’s Quarterly] Report on Form [removed: 10-K] [added: 10-Q] filed with the Commission on [removed: February 16, 2021)(2)](http://www.sec.gov/Archives/edgar/data/0001097864/000162828021002219/exhibit107sonpbrsuawardagr.htm)] [added: May 3, 2021)(2)](http://www.sec.gov/Archives/edgar/data/0001097864/000162828021008547/exhibit103thadtrentpbrsuaw.htm)] | | | | | |

| [removed: 10.7(j)] [added: 10.7(i)] | | | | | | [Restricted Stock Units Award Agreement under the ON Semiconductor Corporation Amended and Restated Stock Incentive Plan for Thad Trent, dated February 16, 2021 (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on May 3, 2021)(2)](http://www.sec.gov/Archives/edgar/data/0001097864/000162828021008547/exhibit102thadtrentrsuawar.htm) | | | | | |

| [removed: 10.7(k)] [added: 10.7(f)] | | | | | | [removed: [Performance-Based] [added: [Form of Annual Performance-Based] Restricted Stock [removed: Units] [added: Unit] Award Agreement under the ON Semiconductor Corporation Amended and Restated Stock Incentive Plan [removed: for Thad Trent, dated February 16, 2021] [added: (2023 form agreement)] (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on May [removed: 3, 2021)(2)](http://www.sec.gov/Archives/edgar/data/0001097864/000162828021008547/exhibit103thadtrentpbrsuaw.htm)] [added: 1, 2023)(2)](http://www.sec.gov/Archives/edgar/data/1097864/000162828023014387/exhibit103-formofpbrsuagre.htm)] | | | | | |

| 10.11 | | | | | | [Employment Agreement by and between Semiconductor Components Industries, LLC and [removed: Vincent C. Hopkin,] [added: Simon Keeton,] dated [removed: as of May 11, 2018] [added: January 1, 2019] (incorporated by reference to Exhibit [removed: 10.2] [added: 10.20] to the Company's [removed: Quarterly] [added: Annual] Report on Form [removed: 10-Q] [added: 10-K] filed with the Commission on [removed: July 30, 2018)(2)](http://www.sec.gov/Archives/edgar/data/1097864/000119312518230892/d550734dex102.htm)] [added: February 20, 2019)(2)](http://www.sec.gov/Archives/edgar/data/1097864/000119312519045025/d664850dex1020.htm)] | | | | | |

| [removed: 10.12] [added: 10.13] | | | | | | [Employment Agreement by and between Semiconductor Components Industries, LLC and [removed: Simon Keeton,] [added: Robert Tong,] dated [removed: January 1, 2019] [added: February 22, 2022] (incorporated by reference to Exhibit [removed: 10.20] [added: 10.14] to the Company's Annual Report on Form 10-K filed with the Commission on February [removed: 20, 2019)(2)](http://www.sec.gov/Archives/edgar/data/1097864/000119312519045025/d664850dex1020.htm)] [added: 6, 2023(2)](http://www.sec.gov/Archives/edgar/data/1097864/000162828023002350/exhibit1014-rtongemploymen.htm)] | | | | | |

| [removed: 10.13] [added: 10.12] | | | | | | [Key Officer Severance and Change in Control Agreement by and between Semiconductor Components Industries, LLC and Ross F. Jatou, dated as of October 1, 2020 (incorporated by reference to Exhibit 10.17 to the Company's Annual Report on Form 10-K filed with the Commission on February 16, 2021)(2)](http://www.sec.gov/Archives/edgar/data/0001097864/000162828021002219/exhibit1017-jatouseverance.htm) | | | | | |

| 21.1 | | | | | | [List of Significant [removed: Subsidiaries(1)](https://www.sec.gov/Archives/edgar/data/1097864/000162828023002350/exhibit211-listofsubsidiar.htm)] [added: Subsidiaries(1)](https://www.sec.gov/Archives/edgar/data/1097864/000162828024003201/exhibit211-listofsubsidiar.htm)] | | | | | |

| 23.1 | | | | | | [Consent of Independent Registered Public Accounting Firm-PricewaterhouseCoopers [removed: LLP(1)](https://www.sec.gov/Archives/edgar/data/1097864/000162828023002350/exhibit2312022formconforme.htm)] [added: LLP(1)](https://www.sec.gov/Archives/edgar/data/1097864/000162828024003201/exhibit2312023formconforme.htm)] | | | | | |

| 24.1 | | | | | | [Powers of [removed: Attorney(1)](https://www.sec.gov/Archives/edgar/data/1097864/000162828023002350/exhibit2412022formpowerofa.htm)] [added: Attorney(1)](https://www.sec.gov/Archives/edgar/data/1097864/000162828024003201/exhibit2412023formpowerofa.htm)] | | | | | |

| 31.1 | | | | | | [Certification by CEO pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002(1)](https://www.sec.gov/Archives/edgar/data/1097864/000162828023002350/exhibit3112022form10-kfinal.htm)] [added: 2002(1)](https://www.sec.gov/Archives/edgar/data/1097864/000162828024003201/exhibit3112023form10-kfinal.htm)] | | | | | |

| 31.2 | | | | | | [Certification by CFO pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002(1)](https://www.sec.gov/Archives/edgar/data/1097864/000162828023002350/exhibit3122022form10-kfinal.htm)] [added: 2002(1)](https://www.sec.gov/Archives/edgar/data/1097864/000162828024003201/exhibit3122023form10-kfinal.htm)] | | | | | |

| 32 | | | | | | [Certification by CEO and CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002(3)](https://www.sec.gov/Archives/edgar/data/1097864/000162828023002350/exhibit322022form10-kfinal.htm)] [added: 2002(3)](https://www.sec.gov/Archives/edgar/data/1097864/000162828024003201/exhibit322023form10-kfinal.htm)] | | | | | |

| 4.5(a) | | | | | | [Indenture, dated as of February 28, 2023, among the Company, the guarantors party thereto and Computershare Trust Company, National Association (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Commission on March 1, 2023)](http://www.sec.gov/Archives/edgar/data/1097864/000119312523056593/d382064dex41.htm) | | | | | |

| 4.5(b) | | | | | | [Form of Global 0.50% Convertible Senior Note due 2029 (included in Exhibit 4.5(a))](http://www.sec.gov/Archives/edgar/data/1097864/000119312523056593/d382064dex41.htm) | | | | | |

| 10.14 | | | | | | [Form of Employment Agreement for Senior Vice Presidents (Direct Reports to Chief Executive Officer)](https://www.sec.gov/Archives/edgar/data/1097864/000162828024003201/exhibit1014formofnewemploy.htm)[(1)(2)](https://www.sec.gov/Archives/edgar/data/1097864/000162828024003201/exhibit1014formofnewemploy.htm) | | | | | |

| 10.20(a) | | | | | | [Form of Confirmation for Convertible Note Hedges related to the Company’s 0.50% Convertible Senior Notes due 2029 (incorporated by reference to Exhibit 10.1 to the Company’s Amendment No. 1 to Current Report on Form 8-K/A filed with the Commission on March 2, 2023)](http://www.sec.gov/Archives/edgar/data/1097864/000119312523057348/d453477dex101.htm) | | | | | |

| 10.20(b) | | | | | | [Form of Confirmation for Warrants related to the Company’s 0.50% Convertible Senior Notes due 2029 (incorporated by reference to Exhibit 10.2 to the Company’s Amendment No. 1 to Current Report on Form 8-K/A filed with the Commission on March 2, 2023)](http://www.sec.gov/Archives/edgar/data/1097864/000119312523057348/d453477dex102.htm) | | | | | |

| 10.21(a) | | | | | | [Credit Agreement, dated as of June 22, 2023, by and among ON Semiconductor Corporation, as borrower, the several lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, JPMorgan Chase Bank, N.A., Bank of America, N.A., Barclays Bank PLC, BMO Capital Markets, Corp., BNP Paribas Securities Corp., Citibank, N.A., Credit Agricole Corporate and Investment Bank, Deutsche Bank Securities, Inc., Goldman Sachs Bank USA, HSBC Securities (USA) N.A., Morgan Stanley Senior Funding, Inc., MUFG Bank, LTD, PNC Bank, National Association and Sumitomo Mitsui Banking Corporation, as joint lead arrangers and joint bookrunners and BMO Capital Markets, as sustainability structuring agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated June 26, 2023)](http://www.sec.gov/Archives/edgar/data/1097864/000119312523174498/d476071dex101.htm) | | | | | |

| 10.21(b) | | | | | | [Guarantee Agreement, dated as of June 22, 2023, among the signatories thereto, as grantors, in favor of JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated June 26, 2023)](http://www.sec.gov/Archives/edgar/data/1097864/000119312523174498/d476071dex102.htm) | | | | | |

| 10.21(c) | | | | | | [Security Agreement, dated as of June 22, 2023, among ON Semiconductor Corporation and the other signatories thereto in favor of JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K dated June 26, 2023)](http://www.sec.gov/Archives/edgar/data/1097864/000119312523174498/d476071dex103.htm) | | | | | |

| 97 | | | | | | [onsemi Dodd-Frank Compensation Recovery Policy(1)](https://www.sec.gov/Archives/edgar/data/1097864/000162828024003201/exhibit97doddfrankclawback.htm) | | | | | |

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| 2.3 | | | | | | [Agreement and Plan of Merger, dated August 25, 2021, by and among ON Semiconductor Corporation, Semiconductor Components Industries, LLC, Terra Merger Sub, Inc., GT Advanced Technologies Inc. and Pirinate Consulting Group 2, LLC, as equityholder representative (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Commission on August 25, 2021)†](http://www.sec.gov/Archives/edgar/data/0001097864/000119312521256288/d196596dex21.htm) | | | | | |

| 10.7(l) | | | | | | [Form of Restricted Stock Award Agreement for Directors under the ON Semiconductor Corporation Amended and Restated Stock Incentive Plan (2022 form agreement) (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on August 1, 2022)(2)](https://www.sec.gov/Archives/edgar/data/1097864/000162828022019900/exhibit101-2022rsaagreemen.htm) | | | | | |

| 10.14 | | | | | | [Employment Agreement by and between Semiconductor Components Industries, LLC and Robert Tong, dated February 16, 2021 (1)(2)](https://www.sec.gov/Archives/edgar/data/1097864/000162828023002350/exhibit1014-rtongemploymen.htm) | | | | | |

| February [removed: 6, 2023] [added: 5, 2024] | | | | | | ON Semiconductor Corporation | | |

| /s/ HASSANE EL-KHOURY Hassane El-Khoury | | | President, Chief Executive Officer and Director | | | February [removed: 6, 2023] [added: 5, 2024] | | |

| /s/ THAD TRENT Thad Trent | | | Executive Vice President, Chief Financial Officer and Treasurer | | | February [removed: 6, 2023] [added: 5, 2024] | | |

| | | | (Principal Financial [added: and Accounting] Officer) | | | | | |

| * | | | Chair of the Board of Directors | | | February [removed: 6, 2023] [added: 5, 2024] | | |

| * | | | Director | | | February [removed: 6, 2023] [added: 5, 2024] | | |

| Gregory [removed: L.] Waters | | | | | | | | |

| *By: /s/ THAD TRENT Thad Trent | | | Attorney-in-Fact | | | February [removed: 6, 2023] [added: 5, 2024] | | |

We have audited the accompanying consolidated balance sheets of ON Semiconductor Corporation and its subsidiaries (the “Company”) as of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] and the related consolidated statements of operations and comprehensive income, of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, [removed: 2022,] [added: 2023,] including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of December 31, [removed: 2022,] [added: 2023,] based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2022] [added: 2023] in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2022,] [added: 2023,] based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the COSO.

[added: A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and] dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

[removed: Also,] projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As described in Notes 2 and 8 to the consolidated financial statements, the Company’s inventory balance of [removed: $1,616.8] [added: $2,111.8] million as of December 31, [removed: 2022,] [added: 2023,] is stated at the lower of standard cost (which approximates actual cost on a first-in, first-out basis) or net realizable value.

| | | | [removed: December] [added: | | | As of December] 31, [added: 2023 | | | | | | | | | | | | | | | | | | As of December 31,] 2022 | | | | | | [removed: December] [added: | | | | | | | | | | | | As of December] 31, 2021 | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Cash and cash equivalents | | | [added: | | |] $ | [added: 2,483.0 | | | | | $ |] 2,919.0 | | | | | $ | 1,352.6 | |

| Receivables, net | | | [removed: 842.3] [added: 935.4] | | | | | | [removed: 809.4] [added: 842.3] | | |

| Inventories | | | [removed: 1,616.8] [added: 2,111.8] | | | | | | [removed: 1,379.5] [added: 1,616.8] | | |

| Other current assets | | | [removed: 351.3] [added: 382.1] | | | | | | [removed: 240.1] [added: 351.3] | | |

| Total current assets | | | [removed: 5,729.4] [added: 5,912.3] | | | | | | [removed: 3,781.6] [added: 5,729.4] | | |

| Property, plant and equipment, net | | | [removed: 3,450.7] [added: 4,401.5] | | | | | | [removed: 2,524.3] [added: 3,450.7] | | |

| Goodwill | | | 1,577.6 | | | | | | [removed: 1,937.5] [added: 1,577.6] | | |

| Intangible assets, net | | | [removed: 359.7] [added: 299.3] | | | | | | [removed: 495.7] [added: 359.7] | | |

| Deferred tax assets | | | [removed: 376.7] [added: 600.8] | | | | | | [removed: 366.3] [added: 376.7] | | |

| Other assets | | | [removed: 438.6] [added: 381.3] | | | | | | [removed: 498.3] [added: 438.6] | | |

| Total assets | | | $ | [removed: 11,978.5] [added: 13,215.2] | | | | | $ | [removed: 9,626.0] [added: 11,978.5] | |

| Accounts payable | | | $ | [removed: 852.1] [added: 725.6] | | | | | $ | [removed: 635.1] [added: 852.1] | |

| Accrued expenses and other current liabilities | | | [removed: 1,047.3] [added: 663.2] | | | | | | [removed: 734.9] [added: 1,047.3] | | |

| Current portion of financing lease liabilities | | | [removed: 14.2] [added: 0.8] | | | | | | [removed: 12.7] [added: 14.2] | | |

| Current portion of long-term debt | | | [removed: 147.8] [added: 794.0] | | | | | | [removed: 160.7] [added: 147.8] | | |

| Total current liabilities | | | [removed: 2,061.4] [added: 2,183.6] | | | | | | [removed: 1,543.4] [added: 2,061.4] | | |

| Long-term debt | | | [removed: 3,045.7] [added: 2,542.6] | | | | | | [removed: 2,913.9] [added: 3,045.7] | | |

| Deferred tax liabilities | | | [removed: 34.1] [added: 38.7] | | | | | | [removed: 43.2] [added: 34.1] | | |

| Long-term financing lease liabilities | | | [removed: 23.0] [added: 22.4] | | | | | | [removed: 10.2] [added: 23.0] | | |

| Other long-term liabilities | | | [removed: 607.3] [added: 627.3] | | | | | | [removed: 510.9] [added: 607.3] | | |

| Total liabilities | | | [removed: 5,771.5] [added: 5,414.6] | | | | | | [removed: 5,021.6] [added: 5,771.5] | | |

| Common stock ($0.01 par value, 1,250,000,000 shares authorized, [removed: 608,367,713] [added: 616,281,996] and [removed: 603,044,079] [added: 608,367,713] shares issued, [removed: 431,936,415] [added: 426,386,426] and [removed: 432,472,818] [added: 431,936,415] shares outstanding, respectively) | | | [removed: 6.1] [added: 6.2] | | | | | | [removed: 6.0] [added: 6.1] | | |

| Additional paid-in capital | | | [removed: 4,670.9] [added: 5,210.9] | | | | | | [removed: 4,633.3] [added: 4,670.9] | | |

| Accumulated other comprehensive loss | | | [removed: (23.2)] [added: (45.2)] | | | | | | [removed: (40.6)] [added: (23.2)] | | |

| * | | | Director | | | February 5, 2024 | | |

| * | | | Director | | | February 5, 2024 | | |

| * | | | Director | | | February 5, 2024 | | |

| * | | | Director | | | February 5, 2024 | | |

| Christina Lampe-Önnerud | | | | | | | | |

| * | | | Director | | | February 5, 2024 | | |

| * | | | Director | | | February 5, 2024 | | |

| * | | | Director | | | February 5, 2024 | | |

Also,

February 5, 2024

| ROU financing lease assets | | | 42.4 | | | | | | 45.8 | | |

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY cont'd (in millions, except share data)

| | | | Common Stock | | | | | | Additional Paid-in Capital | | | Accumulated Other Comprehensive Loss | | | | | | Treasury Stock | | | | | | Non-Controlling Interest | | | | | |

| | | | Number of shares | | | At Par Value | | | Accumulated (Deficit) Earnings | | | Number of shares | | | At Cost | | | Total Equity | | | | | | | | | | | |

| Warrants and bond hedges, net - 0.50% Notes | | | — | | | — | | | (171.5) | | | — | | | — | | | — | | | — | | | — | | | (171.5) | | |

| Tax impact of warrants and bond hedges, net | | | — | | | — | | | 92.3 | | | — | | | — | | | — | | | — | | | — | | | 92.3 | | |

| Partial settlement - 0% Notes | | | 794 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | |

| Partial settlement of bond hedges - 0% Notes | | | — | | | — | | | 0.1 | | | — | | | — | | | (785) | | | (0.1) | | | — | | | — | | |

| Partial settlement of Warrants - 0% Notes | | | 179 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | |

| Partial settlement - 1.625% Notes | | | 5,091,710 | | | 0.1 | | | (0.1) | | | — | | | — | | | — | | | — | | | — | | | — | | |

| Partial settlement of bond hedges - 1.625% Notes | | | — | | | — | | | 472.4 | | | — | | | — | | | (5,091,752) | | | (472.4) | | | — | | | — | | |

| Partial settlement of warrants - 1.625% Notes | | | 159 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Repurchase of common stock | | | — | | | — | | | — | | | — | | | — | | | (7,566,628) | | | (568.1) | | | — | | | (568.1) | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Comprehensive income (loss) | | | — | | | — | | | — | | | (22.0) | | | 2,183.7 | | | — | | | — | | | 1.9 | | | 2,163.6 | | |

| 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 | |

When assets are retired or otherwise disposed of, the

Government Incentives

The Company receives government incentives for various reasons including capital expenditures, operating expenses, or to develop specific technologies, which may require the Company to meet or maintain certain metrics, and may be subject to reduction, termination, or recapture if such conditions are not met or maintained.

Incentives related to specific operating activities are offset against the related expense in the period the expense is incurred.

Government incentives received prior to being earned are recognized in current or non-current liabilities or restricted cash, whereas incentives earned prior to being received are recognized in current or non-current receivables.

Cash incentives related to operating expenses along with incentives that can offset taxes payable are included in operating activities, while cash received related to the acquisition of property, plant, and equipment are included in investing activities in the Consolidated Statements of Cash Flows.

The Company recognizes revenue from manufacturing services when it satisfies the performance obligation by transferring the promised goods or services to the customer.

Depending on the terms of the applicable contractual agreement with the customer, revenue is recognized at the point in time when the customer obtains control of the promised goods or service, or over time when the created asset has no alternate use to the Company and there is an enforceable right to payment for the performance to date.

Revenue recognized for manufacturing services amounted to $248.1 million, $139.9 million and $141.8 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Contract assets were $95.1 million and $2.3 million as of December 31, 2023 and 2022, respectively, of which $83.1 million and $2.3 million, respectively, were recorded as other current assets and $12.0 million and $0.0 million, respectively, were recorded as other assets.

| Revenue from external customers | | | | | | $ | 4,449.0 | | | | | $ | 2,488.5 | | | | | $ | 1,315.5 | | | | | $ | 8,253.0 | |

| /s/ BERNARD R. COLPITTS, JR. Bernard R. Colpitts, Jr. | | | Chief Accounting Officer (Principal Accounting Officer) | | | February 6, 2023 | | |

| Gilles Delfassy | | | | | | | | |

As described in Management’s Report on Internal Control Over Financial Reporting, management has excluded East Fishkill, New York site and fabrication facilities ("EFK") from its assessment of internal control over financial reporting as of December 31, 2022 because it was acquired by the Company in a purchase business combination during 2022.

We have also excluded EFK from our audit of internal control over financial reporting.

EFK's total assets and total revenue excluded from management’s assessment and our audit of internal control over financial reporting represent 3.4% and 0%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2022.

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and

February 6, 2023

ON SEMICONDUCTOR CORPORATION

| Right-of-use financing lease | | | 45.8 | | | | | | 22.3 | | |

| | | | | | | | | | | | | | | | | | | | | |

| Balance at December 31, 2019 | | | 565,562,607 | | | $ | 5.7 | | $ | 3,809.5 | | $ | (54.3) | | $ | 1,191.3 | | (154,249,943) | | | $ | (1,650.5) | | $ | 22.4 | | $ | 3,324.1 | |

| Stock option exercises | | | 5,625 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | |

| Repurchase of common stock | | | — | | | — | | | — | | | — | | | — | | | (3,611,413) | | | (65.4) | | | — | | | (65.4) | | |

| Shares issued to settle excess over principal for 1.00% Notes | | | — | | | — | | | (88.7) | | | — | | | — | | | 11,823,271 | | | 88.7 | | | — | | | — | | |

| Repurchase of shares under bond hedges | | | — | | | — | | | 321.0 | | | — | | | — | | | (11,823,348) | | | (321.0) | | | — | | | — | | |

| Comprehensive income (loss) | | | — | | | — | | | — | | | (3.3) | | | 234.2 | | | — | | | — | | | 2.2 | | | 233.1 | | |

| Settlement of purchase price from previous acquisition | | | — | | | | | | — | | | | | | 26.0 | | |

| Purchase of license and deposit made for manufacturing facility | | | — | | | | | | — | | | | | | (100.0) | | |

- PSG;

- ASG; and

- ISG.

Certain reclassifications have been made to prior period amounts to conform to current-period presentation.

Additionally, during periods where it becomes applicable, significant estimates will be used by management in determining the future cash flows used to assess and test for impairment of long-lived assets and goodwill and in assumptions used in connection with business combinations.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

excess of anticipated demand is written down, impacting cost of revenue and gross profit.

Certain of the Company's customer contracts are multi-year agreements that

Contract assets were $2.3 million as of December 31, 2022, and there were no contract assets as of December 31, 2021.

| Revenue from external customers | | | | | | $ | 2,606.1 | | | | | $ | 1,910.4 | | | | | $ | 738.5 | | | | | $ | 5,255.0 | |

| Segment gross profit (1) | | | | | | 764.1 | | | | | | 714.4 | | | | | | 237.3 | | | | | | 1,715.8 | | |

_______________________

(1)Beginning in 2021, the Company started including unallocated manufacturing costs as part of segment operating results to determine segment gross profit.

As a result, the prior-period amounts have been reclassified to conform to current-period presentation.

| Singapore | | | $ | 978.0 | | | | | $ | 695.0 | | | | | $ | 126.5 | | | | | $ | 1,799.5 | |

| Hong Kong | | | 723.2 | | | | | | 410.6 | | | | | | 177.8 | | | | | | 1,311.6 | | |

| United Kingdom | | | 395.7 | | | | | | 264.5 | | | | | | 145.7 | | | | | | 805.9 | | |

| United States | | | 282.8 | | | | | | 282.0 | | | | | | 163.8 | | | | | | 728.6 | | |

| Other | | | 226.4 | | | | | | 258.3 | | | | | | 124.7 | | | | | | 609.4 | | |

| Total | | | $ | 2,606.1 | | | | | $ | 1,910.4 | | | | | $ | 738.5 | | | | | $ | 5,255.0 | |

| Distributors | | | $ | 1,776.4 | | | | | $ | 986.4 | | | | | $ | 406.8 | | | | | $ | 3,169.6 | |

| Direct Customers | | | 829.7 | | | | | | 924.0 | | | | | | 331.7 | | | | | | 2,085.4 | | |