filings.toolsON Semiconductor 10-Q 2024-09-27
Filed 2024-10-28. 8 sections, 181K characters. Original on sec.gov · Markdown · JSON
Cover and table of contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 27, 2024
Or
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
(Commission File Number) 001-39317
ON SEMICONDUCTOR CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 36-3840979 | |||||||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
5701 N. Pima Road
Scottsdale, AZ 85250
(602) 244-6600
(Address, zip code and telephone number, including area code, of principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
| Common Stock, par value $0.01 per share | ON | The Nasdaq Stock Market LLC | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large Accelerated filer | ☒ | Accelerated filer | ☐ | ||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ☐ | ||||||||
| Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x
The number of shares outstanding of the issuer's class of common stock as of the close of business on October 23, 2024:
| Title of Each Class | Number of Shares | |||||||
| Common Stock, par value $0.01 per share | 425,797,438 |
ON SEMICONDUCTOR CORPORATION FORM 10-Q
TABLE OF CONTENTS
(See the glossary of selected terms immediately following this table of contents for definitions of certain abbreviated terms.)
ON SEMICONDUCTOR CORPORATION
FORM 10-Q
GLOSSARY OF SELECTED ABBREVIATED TERMS*
| Abbreviated Term | Defined Term | |||||||
| 0% Notes | 0% Convertible Senior Notes due 2027 | |||||||
| 0.50% Notes | 0.50% Convertible Senior Notes due 2029 | |||||||
| 1.625% Notes | 1.625% Convertible Senior Notes due 2023 | |||||||
| 3.875% Notes | 3.875% Senior Notes due 2028 | |||||||
| ADAS | Advanced driver-assistance systems | |||||||
| Amended and Restated SIP | ON Semiconductor Corporation Amended and Restated Stock Incentive Plan, as amended | |||||||
| ASU | Accounting Standards Update | |||||||
| Commission or SEC | Securities and Exchange Commission | |||||||
| New Credit Agreement | Credit agreement, dated as of June 22, 2023, by and among the Company, as borrower, the several lenders party thereto, JP Morgan Chase Bank, N.A., as administrative agent, and certain other parties, providing for the Revolving Credit Facility | |||||||
| EFK | East Fishkill, New York fabrication facility | |||||||
| ESPP | ON Semiconductor Corporation 2000 Employee Stock Purchase Plan, as amended | |||||||
| Exchange Act | Securities Exchange Act of 1934, as amended | |||||||
| IP | Intellectual property | |||||||
| IRS | United States Internal Revenue Service | |||||||
| IT | Information Technology | |||||||
| Revolving Credit Facility | A $1.5 billion senior revolving credit facility created pursuant to the New Credit Agreement | |||||||
| ROU | Right-of-use | |||||||
| RSU | Restricted stock unit | |||||||
| SiC | Silicon carbide | |||||||
| Securities Act | Securities Act of 1933, as amended | |||||||
| U.S. or United States | United States of America | |||||||
- Terms used, but not defined, within the body of the Form 10-Q are defined in this Glossary.
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
ON SEMICONDUCTOR CORPORATION
CONSOLIDATED BALANCE SHEETS
(in millions, except share and per share data)
(unaudited)
| September 27, 2024 | December 31, 2023 | ||||||||||
| Assets | |||||||||||
| Cash and cash equivalents | $ | 2,470.2 | $ | 2,483.0 | |||||||
| Short-term investments | 300.0 | — | |||||||||
| Receivables, net | 1,070.6 | 935.4 | |||||||||
| Inventories | 2,242.8 | 2,111.8 | |||||||||
| Other current assets | 461.1 | 382.1 | |||||||||
| Total current assets | 6,544.7 | 5,912.3 | |||||||||
| Property, plant and equipment, net | 4,383.7 | 4,401.5 | |||||||||
| Goodwill | 1,587.9 | 1,577.6 | |||||||||
| Intangible assets, net | 273.1 | 299.3 | |||||||||
| Deferred tax assets | 725.8 | 600.8 | |||||||||
| ROU financing lease assets | 41.1 | 42.4 | |||||||||
| Other assets | 367.3 | 381.3 | |||||||||
| Total assets | $ | 13,923.6 | $ | 13,215.2 | |||||||
| Liabilities and Stockholders’ Equity | |||||||||||
| Accounts payable | $ | 597.5 | $ | 725.6 | |||||||
| Accrued expenses and other current liabilities | 734.3 | 663.2 | |||||||||
| Current portion of financing lease liabilities | 0.4 | 0.8 | |||||||||
| Current portion of long-term debt | 796.4 | 794.0 | |||||||||
| Total current liabilities | 2,128.6 | 2,183.6 | |||||||||
| Long-term debt | 2,547.2 | 2,542.6 | |||||||||
| Deferred tax liabilities | 42.8 | 38.7 | |||||||||
| Long-term financing lease liabilities | 22.4 | 22.4 | |||||||||
| Other long-term liabilities | 578.6 | 627.3 | |||||||||
| Total liabilities | 5,319.6 | 5,414.6 | |||||||||
| Commitments and contingencies (Note 9) | |||||||||||
| ON Semiconductor Corporation stockholders’ equity: | |||||||||||
| Common stock ($0.01 par value, 1,250,000,000 shares authorized, 622,306,537 and 616,281,996 issued, 425,645,765 and 426,386,426 outstanding, respectively) | 6.2 | 6.2 | |||||||||
| Additional paid-in capital | 5,321.9 | 5,210.9 | |||||||||
| Accumulated other comprehensive loss | (49.1) | (45.2) | |||||||||
| Accumulated earnings | 7,741.0 | 6,548.1 | |||||||||
| Less: Treasury stock, at cost: 196,660,772 and 189,895,570 shares, respectively | (4,435.9) | (3,937.4) | |||||||||
| Total ON Semiconductor Corporation stockholders’ equity | 8,584.1 | 7,782.6 | |||||||||
| Non-controlling interest | 19.9 | 18.0 | |||||||||
| Total stockholders’ equity | 8,604.0 | 7,800.6 | |||||||||
| Total liabilities and stockholders’ equity | $ | 13,923.6 | $ | 13,215.2 |
See accompanying notes to consolidated financial statements
ON SEMICONDUCTOR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(in millions, except per share data)
(unaudited)
| Quarters Ended | Nine Months Ended | ||||||||||||||||||||||
| September 27, 2024 | September 29, 2023 | September 27, 2024 | September 29, 2023 | ||||||||||||||||||||
| Revenue | $ | 1,761.9 | $ | 2,180.8 | $ | 5,359.8 | $ | 6,234.9 | |||||||||||||||
| Cost of revenue | 962.5 | 1,150.1 | 2,922.8 | 3,293.3 | |||||||||||||||||||
| Gross profit | 799.4 | 1,030.7 | 2,437.0 | 2,941.6 | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Research and development | 151.0 | 143.4 | 457.5 | 427.1 | |||||||||||||||||||
| Selling and marketing | 65.4 | 68.2 | 203.1 | 211.6 | |||||||||||||||||||
| General and administrative | 95.5 | 110.7 | 275.8 | 273.8 | |||||||||||||||||||
| Amortization of acquisition-related intangible assets | 13.0 | 12.0 | 38.5 | 39.0 | |||||||||||||||||||
| Restructuring, asset impairments and other charges, net | 29.1 | 9.4 | 103.0 | 63.5 | |||||||||||||||||||
| Total operating expenses | 354.0 | 343.7 | 1,077.9 | 1,015.0 | |||||||||||||||||||
| Operating income | 445.4 | 687.0 | 1,359.1 | 1,926.6 | |||||||||||||||||||
| Other income (expense), net: | |||||||||||||||||||||||
| Interest expense | (15.7) | (16.2) | (47.0) | (59.0) | |||||||||||||||||||
| Interest income | 28.6 | 25.7 | 83.6 | 66.8 | |||||||||||||||||||
| Loss on debt prepayment | — | — | — | (13.3) | |||||||||||||||||||
| Loss on divestiture of business | — | (0.1) | — | (0.7) | |||||||||||||||||||
| Other income (expense) | (3.7) | 1.1 | (0.8) | 4.5 | |||||||||||||||||||
| Other income (expense), net | 9.2 | 10.5 | 35.8 | (1.7) | |||||||||||||||||||
| Income before income taxes | 454.6 | 697.5 | 1,394.9 | 1,924.9 | |||||||||||||||||||
| Income tax provision | (51.9) | (114.6) | (200.1) | (302.7) | |||||||||||||||||||
| Net income | 402.7 | 582.9 | 1,194.8 | 1,622.2 | |||||||||||||||||||
| Less: Net income attributable to non-controlling interest | (1.0) | (0.2) | (1.9) | (1.2) | |||||||||||||||||||
| Net income attributable to ON Semiconductor Corporation | $ | 401.7 | $ | 582.7 | $ | 1,192.9 | $ | 1,621.0 | |||||||||||||||
| Net income for diluted earnings per share of common stock (Note 7) | $ | 401.7 | $ | 583.1 | $ | 1,192.9 | $ | 1,622.2 | |||||||||||||||
| Net income per share of common stock attributable to ON Semiconductor Corporation: | |||||||||||||||||||||||
| Basic | $ | 0.94 | $ | 1.35 | $ | 2.79 | $ | 3.76 | |||||||||||||||
| Diluted | $ | 0.93 | $ | 1.29 | $ | 2.75 | $ | 3.61 | |||||||||||||||
| Weighted-average shares of common stock outstanding: | |||||||||||||||||||||||
| Basic | 427.0 | 431.2 | 428.1 | 431.6 | |||||||||||||||||||
| Diluted | 431.7 | 450.7 | 433.8 | 449.3 | |||||||||||||||||||
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion in conjunction with our audited historical consolidated financial statements, which are included in the 2023 Form 10-K, and our unaudited consolidated financial statements for the fiscal quarter ended September 27, 2024, which are included elsewhere in this Form 10-Q. This Management's Discussion and Analysis of Financial Condition and Results of Operations contains statements that are forward-looking. These statements are based on expectations and assumptions as of the date of this Form 10-Q and are subject to risks, uncertainties and other factors. Actual results could differ materially because of the factors discussed below or elsewhere in this Form 10-Q. See Part II, Item 1A. "Risk Factors" of this Form 10-Q and Part I, Item 1A. "Risk Factors" of the 2023 Form 10-K.
Executive Overview
onsemi Overview
We provide intelligent power and intelligent sensing solutions with a primary focus towards automotive and industrial markets to help our customers solve challenging problems and create cutting-edge products for a better future. Our intelligent power technologies enable the electrification of the automotive industry that allows for lighter and longer-range electric vehicles, empowers efficient fast-charging systems and propels sustainable energy for the highest efficiency solar strings and industrial power. Our intelligent power solutions for the automotive industry allow our customers to exceed range targets with lower weight and reduce system cost through efficiency. We are utilizing our extensive range of power technologies to address the growing power demands of artificial intelligence and data centers. Our intelligent sensing technologies support the next generation 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.
We believe the evolution of the automotive industry, with advancements in autonomous driving, ADAS, vehicle electrification, and the increase in electronics content for vehicle platforms, is reshaping the boundaries of transportation. Through sensing integration, we believe our intelligent power solutions achieve superior efficiencies compared to our peers. This integration allows lower temperature operation and reduced cooling requirements while saving costs and minimizing weight. In addition, our power solutions deliver power with less die per module, achieving higher range for a given battery capacity.
During the first quarter of 2024, we renamed our Advanced Solutions Group ("ASG") reportable segment to Analog and Mixed-Signal Group ("AMG") and reorganized the existing divisions within PSG and AMG. See Note 2: ''Segments and Revenue'' in the notes to the unaudited consolidated financial statements included elsewhere in this Form 10-Q for additional information regarding the segment reorganization. As of September 27, 2024, we were organized into the three operating and reportable segments of PSG, AMG and ISG.
Business Strategy Developments
Our primary focus continues to be on profitable revenue with stable gross margin by capturing high-growth megatrends in our focused end-markets of automotive and industrial infrastructure. We design products in highly-differentiated markets focused on customer needs while optimizing and right-sizing our manufacturing footprint to support growth and maintain gross margins through efficiencies and new product development. We are focused on achieving efficiencies in our operating and capital expenditures, capital allocation on research and development investments and resources to accelerate growth in high-margin products.
2024 Business Realignment
In an effort to streamline resources, drive organizational efficiencies, consolidate our global corporate footprint, and align with our "Fab Right" manufacturing strategy, we initiated the 2024 business realignment efforts during the second quarter of 2024. Under this business realignment, approximately 1,100 employees were notified of their employment termination and around 200 additional employees were reassigned or asked to relocate to another site so far. During the nine months ended September 27, 2024, we incurred severance and other related charges of approximately $70.1 million and asset impairments and other charges of approximately $29.5 million. For additional information, see Note 4: ''Restructuring, Asset Impairments and Other Charges, Net'' in the notes to our unaudited consolidated financial statements included elsewhere in this Form 10-Q.
Share Repurchases
During the quarter ended September 27, 2024, we repurchased approximately 2.8 million shares of common stock for an aggregate purchase price of $200.4 million. For additional information, see Note 7: ''Earnings Per Share and Equity'' in the notes to our unaudited consolidated financial statements included elsewhere in this Form 10-Q.
Results of Operations
Quarter Ended September 27, 2024 compared to the Quarter Ended September 29, 2023
The following table summarizes certain information relating to our operating results that has been derived from our unaudited consolidated financial statements (in millions):
| Quarters Ended | |||||||||||||||||
| September 27, 2024 | September 29, 2023 | Dollar Change | |||||||||||||||
| Revenue | $ | 1,761.9 | $ | 2,180.8 | $ | (418.9) | |||||||||||
| Cost of revenue | 962.5 | 1,150.1 | (187.6) | ||||||||||||||
| Gross profit | 799.4 | 1,030.7 | (231.3) | ||||||||||||||
| Operating expenses: | |||||||||||||||||
| Research and development | 151.0 | 143.4 | 7.6 | ||||||||||||||
| Selling and marketing | 65.4 | 68.2 | (2.8) | ||||||||||||||
| General and administrative | 95.5 | 110.7 | (15.2) | ||||||||||||||
| Amortization of acquisition-related intangible assets | 13.0 | 12.0 | 1.0 | ||||||||||||||
| Restructuring, asset impairments and other charges, net | 29.1 | 9.4 | 19.7 | ||||||||||||||
| Total operating expenses | 354.0 | 343.7 | 10.3 | ||||||||||||||
| Operating income | 445.4 | 687.0 | (241.6) | ||||||||||||||
| Other income (expense), net: | |||||||||||||||||
| Interest expense | (15.7) | (16.2) | 0.5 | ||||||||||||||
| Interest income | 28.6 | 25.7 | 2.9 | ||||||||||||||
| Loss on divestiture of business | — | (0.1) | 0.1 | ||||||||||||||
| Other income (expense) | (3.7) | 1.1 | (4.8) | ||||||||||||||
| Other income (expense), net | 9.2 | 10.5 | (1.3) | ||||||||||||||
| Income before income taxes | 454.6 | 697.5 | (242.9) | ||||||||||||||
| Income tax provision | (51.9) | (114.6) | 62.7 | ||||||||||||||
| Net income | 402.7 | 582.9 | (180.2) | ||||||||||||||
| Less: Net income attributable to non-controlling interest | (1.0) | (0.2) | (0.8) | ||||||||||||||
| Net income attributable to ON Semiconductor Corporation | $ | 401.7 | $ | 582.7 | $ | (181.0) |
Revenue
Revenue was $1,761.9 million and $2,180.8 million for the quarters ended September 27, 2024 and September 29, 2023, respectively, representing a decrease of $418.9 million, or approximately 19%, year over year. We had one customer, a distributor, whose revenue accounted for approximately 12% and 11% of our total revenue for the quarters ended September 27, 2024 and September 29, 2023, respectively.
Revenue by operating and reportable segments was as follows (dollars in millions):
| Quarter Ended September 27, 2024 | As a % of Total Revenue (1) | Quarter Ended September 29, 2023 | As a % of Total Revenue (1) | ||||||||||||||||||||
| PSG | $ | 829.4 | 47.1 | % | $ | 1,076.5 | 49.4 | % | |||||||||||||||
| AMG | 653.7 | 37.1 | % | 775.7 | 35.6 | % | |||||||||||||||||
| ISG | 278.8 | 15.8 | % | 328.6 | 15.1 | % | |||||||||||||||||
| Total revenue | $ | 1,761.9 | $ | 2,180.8 |
(1) Certain amounts may not total due to rounding of individual amounts.
Revenue from PSG decreased by $247.1 million, or approximately 23%, for the quarter ended September 27, 2024 compared to the quarter ended September 29, 2023. Revenue from our Automotive Power Division, Multi-Market Power Division and Industrial Power Division decreased by $129.7 million, $58.9 million and $58.5 million, respectively, primarily driven by a decrease in demand in the automotive and industrial end-markets.
Revenue from AMG decreased by $122.0 million, or approximately 16%, for the quarter ended September 27, 2024 compared to the quarter ended September 29, 2023. Revenue from our Sensor Interface Division, Power Management Division and Integrated Circuit Division decreased by $65.4 million, $47.4 million and $9.2 million, respectively, primarily due to a decrease in demand in the automotive and industrial end-markets.
Revenue from ISG decreased by $49.8 million, or approximately 15%, for the quarter ended September 27, 2024 compared to the quarter ended September 29, 2023, largely driven by a decrease in revenue from our Industrial and Consumer Solutions Division and Automotive Sensing Division of $35.1 million and $14.7 million, respectively, primarily due to the decrease in demand for these products in the automotive and industrial end-markets.
Revenue by geographic location, based on sales billed from the respective country or region, was as follows (dollars in millions):
| Quarter Ended September 27, 2024 | As a % of Total Revenue (1) | Quarter Ended September 29, 2023 | As a % of Total Revenue (1) | ||||||||||||||||||||
| Hong Kong | $ | 466.9 | 26.5 | % | $ | 581.9 | 26.7 | % | |||||||||||||||
| Singapore | 449.5 | 25.5 | % | 506.8 | 23.2 | % | |||||||||||||||||
| United Kingdom | 395.8 | 22.5 | % | 464.2 | 21.3 | % | |||||||||||||||||
| United States | 281.9 | 16.0 | % | 424.5 | 19.5 | % | |||||||||||||||||
| Other | 167.8 | 9.5 | % | 203.4 | 9.3 | % | |||||||||||||||||
| Total revenue | $ | 1,761.9 | $ | 2,180.8 |
(1) Certain amounts may not total due to rounding of individual amounts.
Gross Profit and Gross Margin
Gross profit decreased by $231.3 million, or approximately 22%, to $799.4 million for the quarter ended September 27, 2024 compared to $1,030.7 million for the quarter ended September 29, 2023. This was primarily due to the decline in sales volume from existing products and new products which negatively impacted gross profit by approximately $162 million and $77 million, respectively, partially offset by approximately $8 million due to a reduction in the lower-margin manufacturing services revenue at our EFK location.
Our gross margin decreased by approximately 1.9 percentage points to 45.4% for the quarter ended September 27, 2024 from 47.3% for the quarter ended September 29, 2023, primarily due to changes as explained in the segment gross margin sections below.
Our gross profit by operating and reportable segments was as follows (dollars in millions):
| Quarter Ended September 27, 2024 | As a % of Revenue | Quarter Ended September 29, 2023 | As a % of Revenue | ||||||||||||||||||||
| PSG | $ | 344.9 | 41.6 | % | $ | 513.5 | 47.7 | % | |||||||||||||||
| AMG | 325.3 | 49.8 | % | 361.1 | 46.6 | % | |||||||||||||||||
| ISG | 129.2 | 46.3 | % | 156.1 | 47.5 | % | |||||||||||||||||
| Total gross profit | $ | 799.4 | 45.4 | % | $ | 1,030.7 | 47.3 | % |
Explanation for the fluctuation in gross profit amounts and gross margin percentages for the quarter ended September 27, 2024 compared to the quarter ended September 29, 2023 is provided below:
PSG gross profit decreased by $168.6 million, primarily driven by the decline in sales volume from existing products and new products which negatively impacted gross profit by approximately $91 million and $77 million, respectively. PSG gross margin decreased by 6.1 percentage points to 41.6% from 47.7% primarily as a result of the decline in volume, underutilization and the related impact of unfavorable product mix.
AMG gross profit decreased by $35.8 million, primarily driven by the decline in sales volume from existing products which negatively impacted gross profit by approximately $43 million, partially offset by improved gross profit of approximately $8 million due to the reduction in the lower-margin manufacturing services revenue at our EFK location. AMG gross margin increased by 3.2 percentage points to 49.8% from 46.6%, primarily due to the reduction in the lower-margin manufacturing services revenue at our EFK location and favorable changes in product mix.
ISG gross profit decreased by $26.9 million, primarily driven by the decline in sales volume from existing products. ISG gross margin decreased by 1.2 percentage points to 46.3% from 47.5%, primarily driven by unfavorable changes in product mix.
Operating Expenses
Research and development expenses were $151.0 million for the quarter ended September 27, 2024, as compared to $143.4 million for the quarter ended September 29, 2023, representing an increase of $7.6 million, or approximately 5%. The increase was primarily attributable to an increase in payroll-related expenses and production supplies.
Selling and marketing expenses were $65.4 million for the quarter ended September 27, 2024, as compared to $68.2 million for the quarter ended September 29, 2023, representing a decrease of $2.8 million, or approximately 4%. The decrease was primarily attributable to a decrease in sales commissions.
General and administrative expenses were $95.5 million for the quarter ended September 27, 2024, as compared to $110.7 million for the quarter ended September 29, 2023, representing a decrease of $15.2 million, or approximately 14%. The decrease was primarily attributable to a decrease in the bad debt provision with a strategic business partner, compared to the quarter ended September 29, 2023.
Other Operating Expenses
Amortization of Acquisition-Related Intangible Assets
Amortization of acquisition-related intangible assets was $13.0 million for the quarter ended September 27, 2024, as compared to $12.0 million for the quarter ended September 29, 2023, representing an increase of $1.0 million, or approximately 8%.
Restructuring, Asset Impairments and Other, Net
Restructuring, asset impairments and other, net was $29.1 million for the quarter ended September 27, 2024, as compared to $9.4 million for the quarter ended September 29, 2023. Charges incurred for the quarter ended September 27, 2024 primarily relate to restructuring actions during the period. See Note 4: ''Restructuring, Asset Impairments and Other Charges, Net'' in the notes to our unaudited consolidated financial statements included elsewhere in this Form 10-Q for additional information.
Interest Expense
Interest expense decreased by $0.5 million to $15.7 million during the quarter ended September 27, 2024, as compared to $16.2 million during the quarter ended September 29, 2023. The decrease was primarily due to the maturity of the 1.625% Notes in 2023. Our average gross long-term debt for the quarter ended September 27, 2024 was $3,379.9 million at a weighted-average interest rate of 1.9%, as compared to $3,499.5 million at a weighted-average interest rate of 1.8% for the quarter ended September 29, 2023. The calculation of our weighted-average interest rates includes the effect of our interest rate swap agreements.
Interest Income
Interest income increased by $2.9 million, or approximately 11%, to $28.6 million during the quarter ended September 27, 2024 compared to $25.7 million during the quarter ended September 29, 2023, primarily due to higher interest rates and increased balances in interest-bearing accounts.
Other Income (Expense)
During the quarter ended September 27, 2024, other income was $3.7 million compared to an expense of $1.1 million during the quarter ended September 29, 2023.
Income Tax Provision
We recorded an income tax provision of $51.9 million and $114.6 million for the quarters ended September 27, 2024 and September 29, 2023, respectively, representing effective tax rates of 11.4% and 16.4%, respectively. The decrease in our effective tax rate is mainly due to return-to-provision adjustments reflecting additional tax benefits from Foreign Derived Intangible Income.
For additional information, see Note 12: ''Income Taxes'' in the notes to the unaudited consolidated financial statements included elsewhere in this Form 10-Q.
Results of Operations
Nine Months Ended September 27, 2024 compared to the Nine Months Ended September 29, 2023
The following table summarizes certain information relating to our operating results that has been derived from our unaudited consolidated financial statements (in millions):
| Nine Months Ended | |||||||||||||||||
| September 27, 2024 | September 29, 2023 | Dollar Change | |||||||||||||||
| Revenue | $ | 5,359.8 | $ | 6,234.9 | $ | (875.1) | |||||||||||
| Cost of revenue | 2,922.8 | 3,293.3 | (370.5) | ||||||||||||||
| Gross profit | 2,437.0 | 2,941.6 | (504.6) | ||||||||||||||
| Operating expenses: | |||||||||||||||||
| Research and development | 457.5 | 427.1 | 30.4 | ||||||||||||||
| Selling and marketing | 203.1 | 211.6 | (8.5) | ||||||||||||||
| General and administrative | 275.8 | 273.8 | 2.0 | ||||||||||||||
| Amortization of acquisition-related intangible assets | 38.5 | 39.0 | (0.5) | ||||||||||||||
| Restructuring, asset impairments and other charges, net | 103.0 | 63.5 | 39.5 | ||||||||||||||
| Total operating expenses | 1,077.9 | 1,015.0 | 62.9 | ||||||||||||||
| Operating income | 1,359.1 | 1,926.6 | (567.5) | ||||||||||||||
| Other income (expense), net: | |||||||||||||||||
| Interest expense | (47.0) | (59.0) | 12.0 | ||||||||||||||
| Interest income | 83.6 | 66.8 | 16.8 | ||||||||||||||
| Loss on debt prepayment | — | (13.3) | 13.3 | ||||||||||||||
| Loss on divestiture of business | — | (0.7) | 0.7 | ||||||||||||||
| Other income | (0.8) | 4.5 | (5.3) | ||||||||||||||
| Other income (expense), net | 35.8 | (1.7) | 37.5 | ||||||||||||||
| Income before income taxes | 1,394.9 | 1,924.9 | (530.0) | ||||||||||||||
| Income tax provision | (200.1) | (302.7) | 102.6 | ||||||||||||||
| Net income | 1,194.8 | 1,622.2 | (427.4) | ||||||||||||||
| Less: Net income attributable to non-controlling interest | (1.9) | (1.2) | (0.7) | ||||||||||||||
| Net income attributable to ON Semiconductor Corporation | $ | 1,192.9 | $ | 1,621.0 | $ | (428.1) |
Revenue
Revenue was $5,359.8 million and $6,234.9 million for the nine months ended September 27, 2024 and September 29, 2023, respectively, representing a decrease of $875.1 million, or approximately 14%, year over year. We had one customer, a distributor, whose revenue accounted for approximately 11% and 10% of our total revenue for the nine months ended September 27, 2024 and September 29, 2023, respectively.
Revenue by operating and reportable segments was as follows (dollars in millions):
| Nine Months Ended September 27, 2024 | As a % of Total Revenue (1) | Nine Months Ended September 29, 2023 | As a % of Total Revenue (1) | ||||||||||||||||||||
| PSG | $ | 2,538.8 | 47.4 | % | $ | 2,914.8 | 46.7 | % | |||||||||||||||
| AMG | 1,998.5 | 37.3 | % | 2,312.3 | 37.1 | % | |||||||||||||||||
| ISG | 822.5 | 15.3 | % | 1,007.8 | 16.2 | % | |||||||||||||||||
| Total revenue | $ | 5,359.8 | $ | 6,234.9 |
(1) Certain amounts may not total due to rounding of individual amounts.
Revenue from PSG decreased by $376.0 million, or approximately 13%, for the nine months ended September 27, 2024 compared to the nine months ended September 29, 2023. Revenue from our Multi-Market Power Division, Industrial Power Division and Automotive Power Division decreased by $176.3 million, $115.8 million and $83.9 million, respectively, primarily driven by a decrease in demand in the automotive and industrial end-markets.
Revenue from AMG decreased by $313.8 million, or approximately 14%, for the nine months ended September 27, 2024 compared to the nine months ended September 29, 2023. Revenue from our Power Management Division, Integrated Circuit Division and Sensor Interface Division decreased by $157.3 million, $78.6 million and $77.9 million, respectively, primarily due to a decrease in demand in the automotive and industrial end-markets.
Revenue from ISG decreased by $185.3 million, or approximately 18%, for the nine months ended September 27, 2024 compared to the nine months ended September 29, 2023, largely driven by a decrease in revenue from our Industrial and Consumer Solutions Division and Automotive Sensing Division of $100.3 million and $85.0 million, respectively, primarily due to the decrease in demand for these products in the automotive and industrial end-markets.
Revenue by geographic location, including local sales made by operations within each area, based on sales billed from the respective region, was as follows (dollars in millions):
| Nine Months Ended September 27, 2024 | As a % of Total Revenue (1) | Nine Months Ended September 29, 2023 | As a % of Total Revenue (1) | ||||||||||||||||||||
| Hong Kong | $ | 1,325.8 | 24.7 | % | $ | 1,602.5 | 25.7 | % | |||||||||||||||
| Singapore | 1,273.0 | 23.8 | % | 1,476.8 | 23.7 | % | |||||||||||||||||
| United Kingdom | 1,253.6 | 23.4 | % | 1,326.8 | 21.3 | % | |||||||||||||||||
| United States | 1,025.7 | 19.1 | % | 1,194.5 | 19.2 | % | |||||||||||||||||
| Other | 481.7 | 9.0 | % | 634.3 | 10.2 | % | |||||||||||||||||
| Total revenue | $ | 5,359.8 | $ | 6,234.9 |
(1) Certain amounts may not total due to rounding of individual amounts.
Gross Profit and Gross Margin
Gross profit was $2,437.0 million for the nine months ended September 27, 2024 compared to $2,941.6 million for the nine months ended September 29, 2023, representing a decrease of $504.6 million, or approximately 17%. This was primarily due to the decline in sales volume from existing products and new products which negatively impacted gross profit by approximately $487 million and $79 million, respectively, partially offset by approximately $62 million due to a reduction in the lower-margin manufacturing services revenue at our EFK location.
Our gross margin decreased by 1.7 percentage points to 45.5% for the nine months ended September 27, 2024 from 47.2% for the nine months ended September 29, 2023, primarily due to changes as explained in the segment gross margin sections below.
Our gross profit by operating and reportable segments was as follows (dollars in millions):
| Nine Months Ended September 27, 2024 | As a % of Revenue | Nine Months Ended September 29, 2023 | As a % of Revenue | ||||||||||||||||||||
| PSG | $ | 1,059.1 | 41.7 | % | $ | 1,377.9 | 47.3 | % | |||||||||||||||
| AMG | 986.0 | 49.3 | % | 1,075.3 | 46.5 | % | |||||||||||||||||
| ISG | 391.9 | 47.6 | % | 488.4 | 48.5 | % | |||||||||||||||||
| Total gross profit | $ | 2,437.0 | 45.5 | % | $ | 2,941.6 | 47.2 | % | |||||||||||||||
Explanation for the increase or decrease in gross profit amounts and gross margin percentages for the nine months ended September 27, 2024 compared to the nine months ended September 29, 2023 is provided below:
PSG gross profit decreased by $318.8 million, primarily driven by the decline in sales volume from existing products and new products which negatively impacted gross profit by approximately $240 million and $79 million, respectively. PSG gross margin decreased by 5.6 percentage points to 41.7% from 47.3%, primarily as a result of the decline in volume, underutilization and the related impact of unfavorable product mix.
AMG gross profit decreased by $89.3 million, primarily driven by the decline sales volume from existing products which negatively impacted gross profit by approximately $151 million, partially offset by improved gross profit of approximately $62 million from the lower-margin manufacturing services revenue at our EFK location. AMG gross margin increased by 2.8 percentage points to 49.3% from 46.5%, primarily due to the reduction in the lower-margin manufacturing services revenue at our EFK location.
ISG gross profit decreased by $96.5 million, primarily driven by the decline in sales volume from existing products. ISG gross margin decreased 0.9 percentage points to 47.6% from 48.5%, primarily driven by unfavorable changes in product mix.
Operating Expenses
Research and development expenses were $457.5 million for the nine months ended September 27, 2024, as compared to $427.1 million for the nine months ended September 29, 2023, representing an increase of $30.4 million, or approximately 7%. The increase was primarily attributable to an increase in payroll-related expenses and production supplies, partially offset by a decrease in variable compensation.
Selling and marketing expenses were $203.1 million for the nine months ended September 27, 2024, as compared to $211.6 million for the nine months ended September 29, 2023, representing a decrease of $8.5 million, or approximately 4%. The decrease was primarily attributable to a decrease in sales commissions.
General and administrative expenses were $275.8 million for the nine months ended September 27, 2024, as compared to $273.8 million for the nine months ended September 29, 2023, representing an increase of $2.0 million, or approximately 1%. The increase was primarily attributable to expenses associated with information technology initiatives, partially offset by a decrease in the bad debt provision with a strategic business partner and a decrease in variable compensation.
Other Operating Expenses
Amortization of Acquisition-Related Intangible Assets
Amortization of acquisition-related intangible assets was $38.5 million and $39.0 million for the nine months ended September 27, 2024 and September 29, 2023, respectively, representing a decrease of $0.5 million, or approximately 1%. The decrease was due to a reduction in amortization expense as certain intangible assets became fully amortized.
Restructuring, Asset Impairments and Other, Net
Restructuring, asset impairments and other, net was $103.0 million for the nine months ended September 27, 2024, as compared to $63.5 million for the nine months ended September 29, 2023, representing an increase of $39.5 million. Amounts incurred for the nine months ended September 27, 2024 related primarily to the business realignment efforts in the first nine months of 2024. See Note 4: ''Restructuring, Asset Impairments and Other Charges, Net'' in the notes to our unaudited consolidated financial statements included elsewhere in this Form 10-Q for additional information.
Interest Expense
Interest expense decreased by $12.0 million to $47.0 million during the nine months ended September 27, 2024, as compared to $59.0 million during the nine months ended September 29, 2023. The decrease was primarily due to higher variable-rate debt that was paid down and replaced by the 0.50% Notes in 2023. Our average gross long-term debt balance for the nine months ended September 27, 2024 was $3,379.9 million at a weighted-average interest rate of 1.9%, as compared to $3,363.9 million at a weighted-average interest rate of 2.3% for the nine months ended September 29, 2023. The calculation of our weighted-average interest rates includes the effect of our interest rate swap agreements.
Interest Income
Interest income increased by $16.8 million, or approximately 25%, to $83.6 million during the nine months ended September 27, 2024 compared to $66.8 million during the nine months ended September 29, 2023, primarily due to higher interest rates and increased balances in interest-bearing accounts.
Loss on Debt Prepayment
There was no loss on debt prepayment recognized for the nine months ended September 27, 2024, as compared to $13.3 million for the nine months ended September 29, 2023 due to the write-off relating to the partial repayment of the Term Loan "B" Facility in 2023.
Other Income (Expense)
Other income (expense) was an income of $0.8 million for the nine months ended September 27, 2024 as compared to $4.5 million for the nine months ended September 29, 2023.
Income Tax Provision
We recorded an income tax provision of $200.1 million and $302.7 million during the nine months ended September 27, 2024 and September 29, 2023, respectively, representing effective tax rates of 14.3% and 15.7%, respectively. The decrease in our effective tax rate is mainly due to return-to-provision adjustments reflecting additional tax benefits from Foreign Derived Intangible Income.
For additional information, see Note 12: ''Income Taxes'' in the notes to the unaudited consolidated financial statements included elsewhere in this Form 10-Q.
Liquidity and Capital Resources
Overview
Our principal sources of liquidity are cash on hand, cash generated from operations, available borrowings under our Revolving Credit Facility as well as new debt and/or equity issuances. 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 and short-term investments were approximately $2.8 billion as of September 27, 2024, and the Revolving Credit Facility has approximately $1.1 billion available for future borrowings.
We require cash to: (i) fund our operating expenses, working capital requirements, outlays for strategic acquisitions and investments; (ii) service our debt, including principal and interest; (iii) incur capital expenditures; and (iv) repurchase our common stock. During the ordinary course of business, we evaluate our cash requirements and, if necessary, adjust our expenditures to reflect the current market conditions and our projected sales and demand. Our capital expenditures are primarily directed towards manufacturing equipment. Future capital expenditures may be impacted by events and transactions that are not currently forecasted.
We believe that our cash on hand, cash generated from our operations and the amounts available under the Revolving Credit Facility are adequate to meet our working capital requirements and other business needs for at least the next 12 months.
Operating Activities
Our cash flows from operating activities were $1,326.7 million and $1,366.3 million for the nine months ended September 27, 2024 and September 29, 2023, respectively. The decrease of $39.6 million was primarily due to a reduction in net income driven by lower end-market demand for our products partially offset by the timing of cash receipts and payments related to working capital balances.
Our ability to maintain positive operating cash flows is dependent on, among other factors, our success in achieving our revenue goals and manufacturing and operating cost targets. Management of our assets and liabilities, including both working capital and long-term assets and liabilities, also influences our operating cash flows.
Investing Activities
Our cash flows used in investing activities were $858.1 million and $1,352.7 million for the nine months ended September 27, 2024 and September 29, 2023, respectively. The decrease of $494.6 million was primarily attributable to a decrease in capital expenditures and payments for the acquisition of our EFK location during the nine months ended September 29, 2023 partially offset by the purchase of short-term investments. Our capital expenditures as a percent of revenue were approximately 10%, and we expect capital expenditures to be in the range of 8% - 10% of revenue for the remainder of 2024.
Financing Activities
Our cash flows used in financing activities were $480.5 million and $254.3 million for the nine months ended September 27, 2024 and September 29, 2023, respectively. The increase of $226.2 million was primarily attributable to increased share repurchases during the nine months ended September 27, 2024 compared to the same period in 2023. Additionally, during the nine months ended September 29, 2023, we had net cash outflows related to the establishment of our New Credit Agreement.
We do not have any meaningful debt maturing during the next 12 months. Our 0% Notes are also classified as a current liability based on share price trigger provisions. We expect to continue our Share Repurchase Program subject to market conditions, the price of our shares and other factors (including liquidity needs). However, the Share Repurchase Program may be modified, suspended or terminated by the Board of Directors at any time without prior notice.
Key Factors Potentially Affecting Liquidity
We believe that the key factors that could adversely affect our internal and external sources of cash include, among other considerations:
-
changes in demand for our products, competitive pricing pressures, supply chain constraints, effective management of our manufacturing capacity, our ability to achieve further reductions in operating expenses, our ability to make progress on the achievement of our business strategy and sustainability goals, the impact of our restructuring programs on our production and cost efficiency, and our ability to make the research and development expenditures required to remain competitive in our business; and
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the debt and equity capital markets could impact our ability to obtain needed financing on acceptable terms or to respond to business opportunities and developments as they arise, including interest rate fluctuations, macroeconomic conditions, sudden reductions in the general availability of lending from banks or the related increase in cost to obtain bank financing and our ability to maintain compliance with covenants under our debt agreements in effect from time to time.
Debt Guarantees and Related Covenants
As of September 27, 2024, we were in compliance with the indentures relating to our 0% Notes, 0.50% Notes and 3.875% Notes and with covenants included in the New Credit Agreement. The 0% Notes, 0.50% Notes and 3.875% Notes are senior to the existing and future subordinated indebtedness of onsemi and its guarantor subsidiaries, rank equally in right of payment to all of our existing and future senior debt and, as unsecured obligations, are subordinated to all of our existing and future secured debt to the extent of the assets securing such debt.
Recent Accounting Pronouncements
For a discussion of recent accounting pronouncements, see Note 3: ''Recent Accounting Pronouncements and Other Developments'' in the notes to the unaudited consolidated financial statements included elsewhere in this Form 10-Q and our 2023 Form 10-K.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in market risk from the information presented in Part II, Item 7A. "Quantitative and Qualitative Disclosures About Market Risk," in the 2023 Form 10-K.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered in this report, 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 regarding required disclosure.
Changes in Internal Control Over Financial Reporting
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 September 27, 2024.
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 September 27, 2024 which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II: OTHER INFORMATION
Item 1. Legal Proceedings
See Note 9: ''Commitments and Contingencies'' under the heading "Legal Matters" in the notes to the consolidated unaudited financial statements included elsewhere in this Form 10-Q for additional information on our legal proceedings and related matters. See also Part I, Item 1 "Business - Government Regulation" of the 2023 Form 10-K for information on certain environmental matters.
Item 1A. Risk Factors
Our business, financial condition and results of operations are subject to a number of trends, risks and uncertainties. We review and, where applicable, update our risk factors each quarter. There have been no material changes from the risk factors disclosed in Part I, Item 1A of the 2023 Form 10-K.
Forward-Looking Statements
This Quarterly Report on Form 10-Q includes "forward-looking statements," as that term is defined in Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements, other than statements of historical facts, included or incorporated in this Form 10-Q could be deemed forward-looking statements, particularly statements about our plans, strategies and prospects under the heading "Management’s Discussion and Analysis of Financial Condition and Results of Operations." Forward-looking statements are often characterized by the use of words such as "believes," "estimates," "expects," "projects," "may," "will," "intends," "plans," "anticipates," "should" or similar expressions, or by discussions of strategy, plans or intentions. All forward-looking statements in this Form 10-Q are made based on our current expectations, forecasts, estimates and assumptions and involve risks, uncertainties and other factors that could cause results or events to differ materially from those expressed in the forward-looking statements.
Important factors that could cause our actual results to differ materially from those anticipated in the forward-looking statements are described under Part I, Item 1A "Risk Factors" in the 2023 Form 10-K, in this Form 10-Q and from time to time in our other SEC reports. Readers are cautioned not to place undue reliance on forward-looking statements. We assume no obligation to update such information, which 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 in the aforementioned reports and subsequent reports filed with or furnished to the SEC before making any investment decision with respect to our securities. The risk factors described herein and in our 2023 Form 10-K are not all of the risks we may face. Other risks not presently known to us or that we currently believe are immaterial may materially affect our business. If any of the trends, risks or uncertainties actually occurs or continues, our business, financial condition or operating results could be materially adversely affected, the trading prices of our securities could decline and you could lose all or part of your investment. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this cautionary statement.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The following table provides information regarding repurchases of our common stock during the quarter ended September 27, 2024:
| Period (1) | Total Number of Shares Purchased | Average Price Paid per Share ($) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar value of Shares that May Yet be Purchased Under the Plans or Programs (in millions) ($) | ||||||||||||||||||||||
| June 29, 2024 - July 26, 2024 | — | — | — | 2,186.0 | ||||||||||||||||||||||
| July 27, 2024 - August 23, 2024 | 2,469,967 | 71.90 | 2,469,957 | 2,008.4 | ||||||||||||||||||||||
| August 24, 2024 - September 27, 2024 | 298,577 | 75.20 | 298,577 | 1,986.0 | ||||||||||||||||||||||
| Total | 2,768,544 | 72.26 | 2,768,534 |
(1) These time periods represent our fiscal month start and end dates for the third quarter of 2024.
Shares withheld to satisfy statutory tax withholding requirements related to the vesting of share-based awards are not issued or considered repurchases of our common stock under our Share Repurchase Program and, therefore, are excluded from the table above.
Share Repurchase Program
In February 2023, the Board of Directors approved a share repurchase program (the "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. The 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). Any repurchases will be at the Company’s discretion and will be subject to market conditions, the price of our shares and other factors (including liquidity needs). The Share Repurchase Program may be modified, suspended or terminated by the Board of Directors at any time without prior notice.
There were 2.8 million shares of the Company's common stock repurchased under the Share Repurchase Program during the quarter ended September 27, 2024. As of September 27, 2024, the authorized amount remaining under the Share Repurchase Program was approximately $2.0 billion.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Insider Trading Arrangements
During the quarter ended September 27, 2024, 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).
Item 6. Exhibits
EXHIBIT INDEX
| * | Reports filed under the Exchange Act (Form 10-K, Form 10-Q and Form 8-K) are filed under File No. 000-30419 and File No. 001-39317. | ||||
| † | The Company has omitted certain schedules and exhibits pursuant to Item 601(b)(2) of Regulation S-K and, upon request by the Commission, agrees to furnish supplementally to the Commission a copy of any omitted schedule or exhibit. | ||||
| (1) | Filed herewith. | ||||
| (2) | Furnished herewith. | ||||
| (3) | Management contract or compensatory plan, contract or arrangement. |
SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| ON SEMICONDUCTOR CORPORATION (Registrant) | |||||||||||
| Date: | October 28, 2024 | By: | /s/ THAD TRENT | ||||||||
| Thad Trent | |||||||||||
| Executive Vice President, Chief Financial Officer and Treasurer | |||||||||||
| (Principal Financial and Accounting Officer and officer duly authorized to sign this report) | |||||||||||