ON Semiconductor 10-Q 2026-07-03

Filed 2026-08-03. 8 sections, 207K 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 July 3, 2026


☐			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 of the issuer's common stock outstanding at July 29, 2026 was 389,311,721.

ON SEMICONDUCTOR CORPORATION FORM 10-Q

TABLE OF CONTENTS

Part I: Financial Information



			Item 1. Financial Statements (unaudited)			4
			Consolidated Balance Sheets			4
			Consolidated Statements of Operations and Comprehensive Income			5
			Consolidated Statements of Stockholders' Equity			6
			Consolidated Statements of Cash Flows			8
			Notes to Consolidated Financial Statements			9
			Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			30
			Item 3. Quantitative and Qualitative Disclosures About Market Risk			41
			Item 4. Controls and Procedures			41

Part II: Other Information




			Item 1. Legal Proceedings			41
			Item 1A. Risk Factors			42
			Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			46
			Item 3. Defaults Upon Senior Securities			46
			Item 4. Mine Safety Disclosures			46
			Item 5. Other Information			47
			Item 6. Exhibits			48
			Signatures			49

(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
2031 0% Notes						0% Convertible Senior Notes due 2031
0.50% Notes						0.50% Convertible Senior Notes due 2029
3.875% Notes						3.875% Senior Notes due 2028
ADAS						Advanced driver-assistance systems
AI						Artificial Intelligence
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
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

ESPP						ON Semiconductor Corporation 2000 Employee Stock Purchase Plan, as amended
HSR Act						Hart-Scott-Rodino Antitrust Improvement Act of 1976, 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 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)


	July 3, 2026		December 31, 2025
Assets
Cash and cash equivalents	$	3,514.5	$	2,147.6
Short-term investments	350.0		400.0
Receivables, net	897.2		908.0
Inventories	2,047.5		1,989.6
Assets held-for-sale	31.4		25.0
Other current assets	441.2		352.9
Total current assets	7,281.8		5,823.1
Property, plant and equipment, net	2,924.9		3,369.0
Goodwill	1,687.6		1,679.9
Intangible assets, net	329.4		343.9
Deferred tax assets	1,014.3		929.1
ROU financing lease assets	—		23.1
Other assets	247.1		356.0
Total assets	$	13,485.1	$	12,524.1
Liabilities and Stockholders’ Equity
Accounts payable	$	498.3	$	572.3
Accrued expenses and other current liabilities	801.0		714.9
Current portion of financing lease liabilities	0.5		0.5
Current portion of long-term debt	802.1		—
Total current liabilities	2,101.9		1,287.7
Long-term debt	3,657.3		2,980.5
Deferred tax liabilities	46.8		41.7
Long-term financing lease liabilities	22.8		23.8
Other long-term liabilities	417.8		498.5
Total liabilities	6,246.6		4,832.2
Commitments and contingencies (Note 10)
ON Semiconductor Corporation stockholders’ equity:
Common stock ($0.01 par value, 1,250,000,000 shares authorized, 626,960,841 and 624,962,201 issued, 389,290,999 and 396,740,551 outstanding, respectively)	6.3		6.2
Additional paid-in capital	5,632.8		5,538.6
Accumulated other comprehensive loss	(67.1)		(55.5)
Accumulated earnings	8,435.3		8,241.9
Less: Treasury stock, at cost: 237,669,842 and 228,221,650 shares, respectively	(6,788.6)		(6,057.9)
Total ON Semiconductor Corporation stockholders’ equity	7,218.7		7,673.3
Non-controlling interest	19.8		18.6
Total stockholders’ equity	7,238.5		7,691.9
Total liabilities and stockholders’ equity	$	13,485.1	$	12,524.1

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				Six Months Ended
	July 3, 2026		July 4, 2025		July 3, 2026		July 4, 2025
Revenue	$	1,603.5	$	1,468.7	$	3,116.8	$	2,914.4
Cost of revenue	987.2		916.8		1,917.4		2,068.7
Gross profit	616.3		551.9		1,199.4		845.7
Operating expenses:
Research and development	140.8		143.8		285.1		307.9
Selling and marketing	63.3		63.3		126.3		131.6
General and administrative	101.9		91.2		191.3		175.6
Amortization of intangible assets	10.5		11.0		21.0		22.4
Restructuring, asset impairments and other, net	41.2		49.2		370.5		588.5
Total operating expenses	357.7		358.5		994.2		1,226.0
Operating income (loss)	258.6		193.4		205.2		(380.3)
Other income (expense), net:
Interest expense	(13.7)		(17.9)		(26.4)		(35.9)
Interest income	17.4		25.2		35.1		51.8
Other income	8.6		1.5		12.4		5.6
Other income (expense), net	12.3		8.8		21.1		21.5
Income (loss) before income taxes	270.9		202.2		226.3		(358.8)
Income tax (provision) benefit	(43.4)		(30.5)		(31.7)		45.3
Net income (loss)	227.5		171.7		194.6		(313.5)
Less: Net income attributable to non-controlling interest	(0.7)		(1.4)		(1.2)		(2.3)
Net income (loss) attributable to ON Semiconductor Corporation	$	226.8	$	170.3	$	193.4	$	(315.8)


Net income (loss) per share of common stock attributable to ON Semiconductor Corporation:
Basic	$	0.58	$	0.41	$	0.49	$	(0.76)
Diluted	$	0.56	$	0.41	$	0.48	$	(0.76)
Weighted-average shares of common stock outstanding:
Basic	390.3		414.6		392.2		418.0
Diluted	404.4		414.9		401.5		418.0

Comprehensive income (loss), net of tax:
Net income (loss)	$	227.5	$	171.7	$	194.6	$	(313.5)
Foreign currency translation adjustments	(0.9)		1.4		(1.2)		2.8
Effects of cash flow hedges and other adjustments	(4.5)		4.7		(10.4)		9.2
Other comprehensive income (loss), net of tax	(5.4)		6.1		(11.6)		12.0

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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 2025 Form 10-K, and our unaudited consolidated financial statements for the fiscal quarter ended July 3, 2026, 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 2025 Form 10-K.

Executive Overview

onsemi Overview

ON Semiconductor Corporation ("onsemi," "we," "us," "our," or the "Company"), with its wholly and majority-owned subsidiaries, operates under the onsemiTM brand. The Company is organized into three operating and reportable segments: the Power Solutions Group ("PSG"), the Analog and Mixed-Signal Group ("AMG"), and the Intelligent Sensing Group ("ISG").

We deliver intelligent power and intelligent sensing technologies that enable electrification, energy efficiency, safety, and automation across automotive, industrial, and AI data center end-markets. Our intelligent power technologies enable electrified drivetrain and power management applications in the automotive industry and support efficient fast‑charging systems. Our intelligent sensing technologies enable advanced safety applications in automotive through industry‑leading performance and reliability.

We believe the evolution of the automotive industry, with advancements in autonomous driving, ADAS, vehicle electrification, and increased electronics content across vehicle platforms, is reshaping the boundaries of transportation. Through sensing integration, we believe our intelligent power solutions achieve increased 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, improving performance efficiency for a given battery or power capacity.

In the industrial market, our intelligent power technologies propel sustainable energy for the highest efficiency solar strings and industrial power. In the medical field, our intelligent power technologies extend the life of personal diagnostic devices, such as continuous glucose monitors. Our intelligent sensing technologies support the next generation industry through automation, allowing for smarter factories and buildings. Our intelligent power and sensing technologies are enabling robotics and humanoids.

In our other end-market, which includes AI data center products, our intelligent power technologies enable energy efficiency in a market in which energy needs are growing at an exponential rate, and AI data center operators are focused on reducing energy consumption. We believe we have one of the most comprehensive portfolios of products and technologies for this market to address the complete power tree, and we are well-positioned to benefit as next-generation AI data center processors and racks enter the market.

Business Strategy Developments

We are focused on increasing profitable revenue through differentiated technologies to address the high-growth megatrends in automotive, industrial and other markets which include AI data centers. We continue to optimize and right-size our manufacturing footprint to align our capacity with our long-term outlook, while focusing on generating efficiencies that result in meaningful gross margin expansion and operating cash flows. We intend to achieve efficiencies in our operating and capital expenditures and invest in research and development initiatives to accelerate growth in high-margin products.

Definitive Agreement to Acquire Synaptics Incorporated

On June 25, 2026, we entered into an Agreement and Plan of Reorganization (the "Merger Agreement") with Sonic Acquisition Corp. and Synaptics Incorporated ("Synaptics"), pursuant to which Synaptics will become a wholly owned subsidiary of onsemi (the “Merger”). At the effective time of the Merger (the “Closing”), each outstanding share of Synaptics common stock, subject to limited exceptions set forth in the Merger Agreement, will be converted into the right to receive 1.350 shares of the Company's common stock. Based on the exchange ratio, we expect Synaptics stockholders will own approximately 12% of the combined company on a pro forma basis upon closing. The Merger Agreement also provides for our assumption of certain

Synaptics equity awards, subject to certain adjustments thereto in respect of, among other things, performance-based vesting conditions. Our Board of Directors unanimously approved the Merger Agreement and the issuance of our common stock in connection with the Merger.

Pursuant to the Merger Agreement, at the Closing, onsemi will appoint one independent director, designated by onsemi from among those directors serving on the board of directors of Synaptics (“Synaptics Board”) as of immediately prior to the Closing that have been proposed to onsemi by the Synaptics Board for consideration, with such selection to be made after reasonable consultation with, and reasonable consideration of the recommendations of, Synaptics.

The Merger, which is anticipated to close in mid-2027, is subject to the satisfaction or waiver of customary closing conditions, including, but not limited to, adoption of the Merger Agreement by Synaptics’ stockholders, the expiration or early termination of the waiting period under the HSR Act, and other regulatory approvals under certain antitrust and foreign investment regimes, and the absence of any order, injunction or law of such jurisdictions prohibiting the Merger.

The parties’ HSR notifications were filed with the FTC and DOJ on July 17, 2026. The 30-day waiting period following the parties’ filings expires at 11:59 pm, Eastern Time, on August 17, 2026, unless extended by the issuance of a Second Request or earlier terminated by the FTC and DOJ.

The Merger Agreement contains certain termination rights for each of us and Synaptics. In certain circumstances in which the Merger Agreement is terminated, Synaptics may be required to pay us a termination fee of $235.0 million, including if the Merger Agreement is terminated by us due to a change of recommendation by the Synaptics Board, or by Synaptics to enter into a more favorable third-party acquisition proposal, as more fully described in the Merger Agreement. In certain circumstances in which the Merger Agreement is terminated due to the failure to obtain required regulatory approvals, we may be required to pay Synaptics a termination fee of $320.0 million, as more fully described in the Merger Agreement.

For more information on risks related to the Merger, see Part II, Item 1A. "Risk Factors" of this Form 10-Q.

2026 Manufacturing Realignment Program

During the first half of 2026, the Company continued to engage in additional restructuring and cost reduction initiatives under its previously disclosed multi‑year manufacturing realignment program to better align manufacturing capacity and capabilities with anticipated long-term needs.

We expect to incur total severance costs and related benefit expenses of $25.0 million related to the termination of approximately 650 employees. Of this, approximately $2.5 million and $22.7 million was recognized during the quarter and six months ended July 3, 2026, respectively. We also recorded non-cash impairment charges of $16.3 million and $163.3 million during the quarter and six months ended July 3, 2026, respectively, related to previous investments in manufacturing equipment at certain manufacturing facilities pursuant to held-for-sale accounting guidance. Other charges of $22.4 million and $184.5 million for the quarter and six months ended July 3, 2026, related to contract termination costs and other facility exit activities during the quarter ended July 3, 2026 and accelerated depreciation of leasehold improvements and accelerated amortization of ROU assets that were abandoned in connection with the 2025 and 2026 Manufacturing Realignment Programs during the six months ended July 3, 2026. The total of the aforementioned costs was included within Restructuring, Asset Impairments and Other, Net in the Consolidated Statement of Operations. We also recorded $13.4 million of restructuring-related charges for the quarter ended July 3, 2026 within Cost of revenue in the Consolidated Statement of Operations.

For additional information, see Note 5: ''Restructuring, Asset Impairments and Other, Net'' in the notes to our unaudited consolidated financial statements included elsewhere in this Form 10-Q.

Share Repurchases

During the quarter ended July 3, 2026, we repurchased approximately 3.1 million shares of common stock for an aggregate purchase price of $334.7 million. During the six months ended July 3, 2026, we repurchased approximately 8.8 million shares of common stock for an aggregate purchase price of $683.3 million. For additional information, see Note 8: ''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 July 3, 2026 compared to the Quarter Ended July 4, 2025

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
	July 3, 2026		July 4, 2025		Dollar Change
Revenue	$	1,603.5	$	1,468.7	$	134.8
Cost of revenue	987.2		916.8		70.4
Gross profit	616.3		551.9		64.4
Operating expenses:
Research and development	140.8		143.8		(3.0)
Selling and marketing	63.3		63.3		—
General and administrative	101.9		91.2		10.7
Amortization of intangible assets	10.5		11.0		(0.5)
Restructuring, asset impairments and other, net	41.2		49.2		(8.0)
Total operating expenses	357.7		358.5		(0.8)
Operating income	258.6		193.4		65.2
Other income (expense), net:
Interest expense	(13.7)		(17.9)		4.2
Interest income	17.4		25.2		(7.8)
Other income	8.6		1.5		7.1
Other income (expense), net	12.3		8.8		3.5
Income before income taxes	270.9		202.2		68.7
Income tax provision	(43.4)		(30.5)		(12.9)
Net income	227.5		171.7		55.8
Less: Net income attributable to non-controlling interest	(0.7)		(1.4)		0.7
Net income attributable to ON Semiconductor Corporation	$	226.8	$	170.3	$	56.5

The following table summarizes certain information relating to our segment results (in millions):


	Quarter Ended July 3, 2026		As a % of Total		Quarter Ended July 4, 2025		As a % of Total		Dollar Change
Revenue:
PSG	$	829.0	51.7	%	$	698.2	47.5	%	$	130.8
AMG	545.7		34.0	%	555.9		37.9	%	(10.2)
ISG	228.8		14.3	%	214.6		14.6	%	14.2
Total	$	1,603.5	100.0	%	$	1,468.7	100.0	%	$	134.8

Cost of revenue:
PSG	$	598.7	60.6	%	$	517.4	56.4	%	$	81.3
AMG	254.5		25.8	%	274.1		29.9	%	(19.6)
ISG	134.0		13.6	%	125.3		13.7	%	8.7
Total	$	987.2	100.0	%	$	916.8	100.0	%	$	70.4

Gross profit: (1)
PSG	$	230.3	27.8	%	$	180.8	25.9	%	$	49.5
AMG	291.2		53.4	%	281.8		50.7	%	9.4
ISG	94.8		41.4	%	89.3		41.6	%	5.5
Total	$	616.3	38.4	%	$	551.9	37.6	%	$	64.4

(1) Gross profit margin as a percentage of respective segment revenue balances.

Revenue

Revenue was $1,603.5 million and $1,468.7 million for the quarters ended July 3, 2026 and July 4, 2025, respectively, representing an increase of $134.8 million, or approximately 9%, year over year due to increased demand across all end-markets. We had one customer, a distributor, whose revenue accounted for approximately 14% and 12% of our total revenue for each of the quarters ended July 3, 2026 and July 4, 2025, across all reportable segments.

Revenue from PSG

Revenue from PSG increased by $130.8 million, or approximately 19%, for the quarter ended July 3, 2026 compared to the quarter ended July 4, 2025 due to increased demand. This was driven by an increase in revenue of $44.5 million, $22.4 million and $63.9 million in the automotive, industrial and other end-markets, respectively.

Revenue from AMG

Revenue from AMG decreased by $10.2 million, or approximately 2%, for the quarter ended July 3, 2026 compared to the quarter ended July 4, 2025, primarily driven by a decrease of $11.5 million within the industrial end-market due to lower demand, while the sales within the automotive and other end-markets remained relatively consistent.

Revenue from ISG

Revenue from ISG increased by $14.2 million, or approximately 7%, for the quarter ended July 3, 2026 compared to the quarter ended July 4, 2025 due to increased demand. This was driven by an increase in revenue of $2.6 million, $5.6 million and $6.0 million in the automotive, industrial and other end-markets.

Revenue by Geographic Location

Revenue by geographic location, based on sales billed from the respective country or region, was as follows (dollars in millions):


	Quarter Ended July 3, 2026		As a % of Total Revenue (1)		Quarter Ended July 4, 2025		As a % of Total Revenue (1)
Hong Kong	$	444.2	27.7	%	$	413.3	28.1	%
United Kingdom	353.9		22.1	%	327.4		22.3	%
Singapore	386.4		24.1	%	326.9		22.3	%
United States	300.6		18.7	%	277.9		18.9	%
Other	118.4		7.4	%	123.2		8.4	%
Total revenue	$	1,603.5			$	1,468.7

(1) Certain amounts may not total due to rounding of individual amounts.

Gross Profit and Gross Margin

Gross profit increased by $64.4 million, or approximately 12%, to $616.3 million for the quarter ended July 3, 2026 compared to $551.9 million for the quarter ended July 4, 2025 primarily due to increased revenue across all end-markets, improved manufacturing utilization and favorable mix within certain business segments

Our gross margin increased by 0.8 percentage points from 37.6% for the quarter ended July 4, 2025 to 38.4% for the quarter ended July 3, 2026. The increase was primarily driven by improved manufacturing utilization and favorable mix within certain business segments.

PSG gross profit increased by $49.5 million, primarily driven by higher revenue across all end‑markets and improved absorption resulting from higher manufacturing utilization. PSG gross margin increased by 1.9 percentage points to 27.8% from 25.9%, primarily due to improved utilization and operating leverage on higher volumes during the quarter ended July 3, 2026.

AMG gross profit increased by $9.4 million and gross margin increased by 2.7 percentage points to 53.4% from 50.7%, primarily due to a more favorable product mix, including a higher proportion of higher-margin products, which more than offset lower industrial end-market revenue.

ISG gross profit increased by $5.5 million, primarily driven by higher revenue across all end-markets. ISG gross margin decreased to 41.4% from 41.6%.

Operating Expenses

Research and development expenses were $140.8 million for the quarter ended July 3, 2026, as compared to $143.8 million for the quarter ended July 4, 2025, representing a decrease of $3.0 million, or approximately 2%. The decrease was primarily attributable to a decrease in production material costs and other variable expenses.

Selling and marketing expenses were $63.3 million for the quarter ended July 3, 2026, as compared to $63.3 million for the quarter ended July 4, 2025.

General and administrative expenses were $101.9 million for the quarter ended July 3, 2026, as compared to $91.2 million for the quarter ended July 4, 2025, representing an increase of $10.7 million, or approximately 12%. The increase was primarily attributable to third-party acquisition costs for the proposed Synaptics Merger and higher payroll‑related expenses.

Other Operating Expenses

Amortization of Intangible Assets

Amortization of intangible assets was $10.5 million for the quarter ended July 3, 2026, as compared to $11.0 million for the quarter ended July 4, 2025, representing a decrease of $0.5 million, or approximately 5%.

Restructuring, Asset Impairments and Other, Net

Restructuring, asset impairments and other, net was $41.2 million for the quarter ended July 3, 2026, as compared to $49.2 million for the quarter ended July 4, 2025. Charges incurred for the quarter ended July 3, 2026 related to restructuring actions during the period. See Note 5: ''Restructuring, Asset Impairments and Other, 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 $4.2 million to $13.7 million during the quarter ended July 3, 2026, as compared to $17.9 million during the quarter ended July 4, 2025, due to the repayment of the Revolving Credit Facility on December 31, 2025. Our average gross long-term debt for the quarter ended July 3, 2026 was $3,754.9 million at a weighted-average interest rate of 1.5%, as compared to $3,379.9 million at a weighted-average interest rate of 2.1% for the quarter ended July 4, 2025.

Interest Income

Interest income decreased by $7.8 million, or approximately 31%, to $17.4 million during the quarter ended July 3, 2026 compared to $25.2 million during the quarter ended July 4, 2025. The decrease was primarily attributable to lower interest rates earned on cash equivalents and short‑term investments.

Other Income (Expense)

During the quarter ended July 3, 2026, other income was $8.6 million compared to other income of $1.5 million during the quarter ended July 4, 2025, primarily attributable to increased dividend income.

Income Tax Provision

We recorded an income tax provision of $43.4 million and $30.5 million for the quarters ended July 3, 2026 and July 4, 2025, respectively, representing effective tax rates of 16.0% and 15.1%, respectively.

For additional information, see Note 13: ''Income Taxes'' in the notes to the unaudited consolidated financial statements included elsewhere in this Form 10-Q.

Results of Operations

Six Months Ended July 3, 2026 compared to the Six Months Ended July 4, 2025

The following table summarizes certain information relating to our operating results that has been derived from our unaudited consolidated financial statements (in millions):


	Six Months Ended
	July 3, 2026		July 4, 2025		Dollar Change
Revenue	$	3,116.8	$	2,914.4	$	202.4
Cost of revenue	1,917.4		2,068.7		(151.3)
Gross profit	1,199.4		845.7		353.7
Operating expenses:
Research and development	285.1		307.9		(22.8)
Selling and marketing	126.3		131.6		(5.3)
General and administrative	191.3		175.6		15.7
Amortization of intangible assets	21.0		22.4		(1.4)
Restructuring, asset impairments and other, net	370.5		588.5		(218.0)
Total operating expenses	994.2		1,226.0		(231.8)
Operating income (loss)	205.2		(380.3)		585.5
Other income (expense), net:
Interest expense	(26.4)		(35.9)		9.5
Interest income	35.1		51.8		(16.7)
Other income	12.4		5.6		6.8
Other income (expense), net	21.1		21.5		(0.4)
Income (loss) before income taxes	226.3		(358.8)		585.1
Income tax (provision) benefit	(31.7)		45.3		(77.0)
Net income (loss)	194.6		(313.5)		508.1
Less: Net income attributable to non-controlling interest	(1.2)		(2.3)		1.1
Net income (loss) attributable to ON Semiconductor Corporation	$	193.4	$	(315.8)	$	509.2

The following table summarizes certain information relating to our segment results (in millions):


	Six Months Ended July 3, 2026		As a % of Total		Six Months Ended July 4, 2025		As a % of Total		Dollar Change
Revenue:
PSG	$	1,565.6	50.3	%	$	1,343.3	46.1	%	$	222.3
AMG	1,086.1		34.8	%	1,122.3		38.5	%	(36.2)
ISG	465.1		14.9	%	448.8		15.4	%	16.3
Total revenue	$	3,116.8	100.0	%	$	2,914.4	100.0	%	$	202.4

Cost of revenue:
PSG	$	1,134.9	59.1	%	$	1,039.3	50.2	%	$	95.6
AMG	505.3		26.4	%	539.6		26.1	%	(34.3)
ISG	277.2		14.5	%	489.8		23.7	%	(212.6)
Total	$	1,917.4	100.0	%	$	2,068.7	100.0	%	$	(151.3)

Gross profit: (1)
PSG	$	430.7	27.5	%	$	304.0	22.6	%	$	126.7
AMG	580.8		53.5	%	582.7		51.9	%	(1.9)
ISG	187.9		40.4	%	(41.0)		(9.1)	%	228.9
Total	$	1,199.4	38.5	%	$	845.7	29.0	%	$	353.7

(1) Gross profit margin as a percentage of respective segment revenue balances.

Revenue

Revenue was $3,116.8 million and $2,914.4 million for the six months ended July 3, 2026 and July 4, 2025, respectively, representing an increase of $202.4 million, or approximately 7%, year over year due to increased demand across all end-markets. We had one customer, a distributor, whose revenue accounted for approximately 13% and 11% of our total revenue for the six months ended July 3, 2026 and July 4, 2025, respectively.

Revenue from PSG

Revenue from PSG increased by $222.3 million, or approximately 17%, for the six months ended July 3, 2026 compared to the six months ended July 4, 2025 due to increased demand. This was driven by an increase in revenue of $97.6 million, $29.8 million and $94.9 million in the automotive, industrial and other end-markets, respectively.

Revenue from AMG

Revenue from AMG decreased by $36.2 million, or approximately 3%, for the six months ended July 3, 2026 compared to the six months ended July 4, 2025 attributable to lower demand in all end-markets. This was driven by a decrease in revenue of $15.3 million, $6.5 million and $14.4 million in the automotive, industrial and other end-markets, respectively.

Revenue from ISG

Revenue from ISG increased by $16.3 million, or approximately 4%, for the six months ended July 3, 2026 compared to the six months ended July 4, 2025 due to increased demand. This was driven by an increase in revenue of $1.2 million, $10.2 million and $4.9 million in the automotive, industrial and other end-markets.

Revenue by Geographic Location

Revenue by geographic location, based on sales billed from the respective country or region, was as follows (dollars in millions):


	Six Months Ended July 3, 2026		As a % of Total Revenue (1)		Six Months Ended July 4, 2025		As a % of Total Revenue (1)
Hong Kong	$	813.1	26.1	%	$	783.4	26.9	%
United Kingdom	746.1		23.9	%	694.9		23.8	%
Singapore	708.6		22.7	%	600.7		20.6	%
United States	597.1		19.2	%	570.5		19.6	%
Other	251.9		8.1	%	264.9		9.1	%
Total revenue	$	3,116.8			$	2,914.4

(1) Certain amounts may not total due to rounding of individual amounts.

Gross Profit and Gross Margin

Gross profit increased by $353.7 million, or approximately 42%, to $1,199.4 million for the six months ended July 3, 2026 compared to $845.7 million for the six months ended July 4, 2025 primarily due to the absence of $235.8 million of excess and obsolete inventory charges and a decrease in write-offs of consumables and manufacturing supplies recognized during the six months ended July 4, 2025.

Our gross margin increased by 9.5 percentage points from 29.0% for the six months ended July 4, 2025 to 38.5% for the six months ended July 3, 2026. The increase was primarily driven by the absence of prior-year excess and obsolete inventory charges and a decrease in consumables write-offs, slightly improved manufacturing utilization and favorable mix within certain business segments, partially offset by lower volumes in select end-markets.

PSG gross profit increased by $126.7 million, primarily driven by higher revenue across all end-markets and improved absorption resulting from higher manufacturing utilization. PSG gross margin increased by 4.9 percentage points to 27.5% from 22.6%, primarily due to the decrease in write-offs of consumables and manufacturing supplies charge during the six months ended July 4, 2025, as well as improved utilization and operating leverage on higher volumes during the six months ended July 3, 2026.

AMG gross profit decreased by $1.9 million, primarily driven by the decline in demand across all end-markets. AMG gross margin increased by 1.6 percentage points to 53.5% from 51.9% primarily due to product mix, including a higher proportion of higher-margin offerings, which partially offset the impact of lower overall volume.

ISG gross profit increased by $228.9 million and gross margin increased to 40.4% from (9.1)%, primarily due to the absence of $230.3 million of excess and obsolete inventory charges recognized during the six months ended July 4, 2025, which did not reoccur during the six months ended July 3, 2026.

Operating Expenses

Research and development expenses were $285.1 million for the six months ended July 3, 2026, as compared to $307.9 million for the six months ended July 4, 2025, representing a decrease of $22.8 million, or approximately 7%. The decrease was primarily attributable to a decrease in production material costs and other variable expenses.

Selling and marketing expenses were $126.3 million for the six months ended July 3, 2026, as compared to $131.6 million for the six months ended July 4, 2025, representing a decrease of $5.3 million, or approximately 4%. The decrease was primarily attributable to lower payroll-related expenses and reduced commission costs.

General and administrative expenses were $191.3 million for the six months ended July 3, 2026, as compared to $175.6 million for the six months ended July 4, 2025, representing an increase of $15.7 million, or approximately 9%. The increase was primarily attributable to third-party acquisition costs for the proposed Synaptics Merger and higher payroll-related expenses.

Other Operating Expenses

Amortization of Intangible Assets

Amortization of intangible assets was $21.0 million and $22.4 million for the six months ended July 3, 2026 and July 4, 2025, respectively, representing a decrease of $1.4 million, or approximately 6%.

Restructuring, Asset Impairments and Other, Net

Restructuring, asset impairments and other, net was $370.5 million for the six months ended July 3, 2026, as compared to $588.5 million for the six months ended July 4, 2025, representing a decrease of $218.0 million. Charges incurred for the six months ended July 3, 2026 primarily relate to restructuring actions during the period. See Note 5: ''Restructuring, Asset Impairments and Other, 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 $9.5 million to $26.4 million during the six months ended July 3, 2026, as compared to $35.9 million during the six months ended July 4, 2025, due to the repayment of the Revolving Credit Facility on December 31, 2025. Our average gross long-term debt balance for the six months ended July 3, 2026 was $3,754.9 million at a weighted-average interest rate of 2.8%, as compared to $3,379.9 million at a weighted-average interest rate of 2.1% for the six months ended July 4, 2025.

Interest Income

Interest income decreased by $16.7 million, or approximately 32%, to $35.1 million during the six months ended July 3, 2026 compared to $51.8 million during the six months ended July 4, 2025. The decrease was primarily attributable to lower interest rates earned on cash equivalents and short-term investments.

Other Income (Expense)

Other income was $12.4 million for the six months ended July 3, 2026 as compared to other income of $5.6 million for the six months ended July 4, 2025, primarily attributable to increased dividend income.

Income Tax (Provision) Benefit

We recorded an income tax provision of $31.7 million and income tax benefit of $45.3 million during the six months ended July 3, 2026 and July 4, 2025, respectively, representing effective tax rates of 14.0% and 12.6%, respectively.

For additional information, see Note 13: ''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, short-term investments, 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. Our cash and cash equivalents and short-term investments were approximately $3.9 billion as of July 3, 2026, and the Revolving Credit Facility has approximately $1.5 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. 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 operations, 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 and thereafter for the foreseeable future. Because the pending Synaptics acquisition is structured as an all-stock transaction, the merger consideration is not expected to require a significant use of the Company's cash or other liquidity resources. The ultimate treatment of Synaptics' existing indebtedness following the closing of the transaction is unknown at this time

We continually evaluate our debt and capital structure and, when appropriate, we have completed and may in the future opportunistically undertake various measure to secure liquidity, repurchase shares of our common stock, reduce interest costs, amend, replace, renew, refinance, redeem or repurchase existing key financing arrangements and, in some cases, extend a portion of our debt maturities to continue to provide us additional operating flexibility.

Operating Activities

Our cash flows from operating activities were $698.8 million and $786.6 million for the six months ended July 3, 2026 and July 4, 2025, respectively. The decrease in operating cash flows by $87.8 million was primarily driven by unfavorable changes in working capital, including the timing of cash receipts and payments.

Net income for the six months ended July 3, 2026 improved compared to the prior‑year period, primarily due to lower non‑cash asset impairment and restructuring‑related charges, partially offset by accelerated depreciation and amortization expense for ROU assets and related improvements that were abandoned in connection with the 2025 and 2026 Manufacturing Realignment Programs. However, these improvements in earnings did not directly translate to higher operating cash flows, as working capital requirements had a more significant impact on cash generation during the period.

Our ability to generate positive operating cash flows depends on, among other factors, the achievement of revenue targets, management of manufacturing and operating costs and effective management of working capital. The timing of collections from customers, payments to suppliers and inventory management also significantly influences our operating cash flows.

Investing Activities

Our cash flows used in investing activities were $9.4 million and $336.6 million for the six months ended July 3, 2026 and July 4, 2025, respectively. The decrease of $327.2 million was primarily attributable to a decrease in capital expenditures and a decrease in the payments for acquisition of a business during the six months ended July 3, 2026. Our capital expenditures as a percentage of revenue were approximately 2%, and we expect capital expenditures of less than 5% of revenue for the year ended December 31, 2026.

Financing Activities

Our cash flows provided by financing activities were $678.1 million for the six months ended July 3, 2026 and our cash flows used in financing activities were $617.7 million for the six months ended July 4, 2025. The change of $1,295.8 million was primarily attributable to the issuance of the $1.5 billion 2031 0% Notes during the six months ended July 3, 2026.

Our 0% Notes will mature on May 1, 2027 unless earlier repurchased or redeemed by the Company or converted pursuant to their terms. We expect to continue our New Share Repurchase Program subject to market conditions, the price of our shares and other factors (including liquidity needs). However, the New 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
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 July 3, 2026, we were in compliance with the indentures relating to our 0% Notes, 2031 0% Notes, 0.50% Notes and 3.875% Notes and with covenants included in the Credit Agreement. The 0% Notes, 2031 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 2025 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 2025 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 July 3, 2026.

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 July 3, 2026 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 10: ''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 2025 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 2025 Form 10-K, other than the addition of the following risk factors:

Trends, Risks and Uncertainties Related to the Proposed Transaction with Synaptics

Completion of the proposed transaction with Synaptics may be delayed or not occur at all for a variety of reasons, including that the Merger Agreement is terminated, and the failure to complete the Merger could adversely affect our business, results of operations, financial condition, and the market price of our common stock.

On June 25, 2026, we entered into the Merger Agreement with Synaptics, pursuant to which Synaptics will become a wholly owned subsidiary of onsemi. Completion of the Merger is subject to customary closing conditions, including (1) the adoption of the Merger Agreement by the holders of a majority of the shares of Synaptics common stock outstanding and entitled to vote (the “Required Synaptics Stockholder Vote”), (2) the expiration or early termination of the applicable waiting period under the HSR Act, and the approval of the Merger under certain other antitrust and foreign investment regimes, (3) the absence of any order, injunction or law of certain jurisdictions prohibiting the Merger, (4) the effectiveness of the registration statement pursuant to which shares of onsemi common stock to be issued in the Merger will be registered with the SEC, (5) the approval for listing on Nasdaq of shares of onsemi common stock to be issued in the Merger, (6) the accuracy of the other party’s representations and warranties, subject to certain standards set forth in the Merger Agreement, (7) compliance in all material respects with the other party’s covenants and other obligations under the Merger Agreement, (8) the absence of a continuing material adverse effect with respect to each of onsemi and Synaptics, and (9) the receipt by each party of customary closing tax opinions regarding the intended tax treatment of the Merger. Therefore, there can be no assurance that the Merger will be completed in the expected timeframe (mid-2027), or at all. Subject to the terms and conditions of the Merger Agreement, the parties have agreed to use reasonable best efforts to take all actions reasonably necessary to consummate the Merger, including obtaining all required or necessary consents, approvals or waivers from third parties, and cooperating to obtain the regulatory approvals necessary to complete the Merger.

The Merger Agreement may be terminated under certain circumstances, including (1) by either onsemi or Synaptics if the Merger is not completed by June 25, 2027, which date may be extended for up to three periods of three months each, in each case under certain circumstances (the “End Date”), (2) by either onsemi or Synaptics if any court or governmental authority of a specified jurisdiction has issued a final non-appealable order or injunction prohibiting the Merger, (3) by onsemi prior to the Required Synaptics Stockholder Vote if the Synaptics Board fails to include in its proxy statement its recommendation to its stockholders to vote in favor of the adoption of the Merger Agreement or changes its recommendation, (4) by Synaptics prior to the Required Synaptics Stockholder Vote in order to accept a Superior Proposal (as defined in the Merger Agreement) (subject to payment of a termination fee, described below), (5) by either onsemi or Synaptics if Synaptics fails to receive the Required Synaptics Stockholder Vote at its stockholder meeting (including any adjournments and postponements thereof), or (6) by either party if the other party materially breaches its covenants, or breaches its representations and warranties, in the Merger Agreement such that the applicable conditions to closing would not be satisfied, subject in certain cases to the right of the breaching party to cure the breach. onsemi and Synaptics may also terminate the Merger Agreement by mutual written consent.

Upon termination of the Merger Agreement, Synaptics, under specified circumstances, including termination by Synaptics to accept a Superior Proposal or by onsemi following a change in recommendation by the Synaptics Board, will be required to pay onsemi a termination fee of $235.0 million. Additionally, onsemi, under specified circumstances, including termination following an injunction arising in connection with certain antitrust or foreign investment laws, or failure to receive certain required regulatory approvals of specified governmental authorities by the End Date, will be required to pay Synaptics a regulatory termination fee of $320.0 million.

Failure to complete the Merger within the expected timeframe or at all could adversely affect our business and the market price of our common stock in a number of ways, including:

the market price of our common stock may decline to the extent that the current market price reflects an assumption that the Merger will be consummated;
if the Merger Agreement is terminated under certain circumstances specified in the Merger Agreement, we would be required to pay a termination fee as described above;
we have incurred, and will continue to incur, significant expenses for professional services in connection with the Merger for which we will have received little or no benefit if the Merger is not consummated; and
we may experience negative publicity and/or reactions from our investors, employees, customers, suppliers, distributors and other business partners.

Completion of the proposed Merger is subject to the satisfaction or waiver of closing conditions contained in the Merger Agreement, including certain regulatory approvals which may not be received, may take longer than expected or the receipt of which may impose conditions that are not presently anticipated or that cannot be met, and if these closing conditions are not satisfied or waived, the proposed Merger will not be completed.

Various consents, clearances, approvals, authorizations and declarations of non-objection, or expiration of waiting periods (or extensions thereof), from certain regulatory and governmental authorities in the United States and certain other jurisdictions are included in the Merger Agreement as conditions to completing the proposed Merger. Regulatory and governmental entities may impose conditions on their respective approvals, in which case lengthy negotiations may ensue among such regulatory or governmental entities, the Company and Synaptics. Such conditions, any such negotiations and the process of obtaining such regulatory approvals, consents or clearances, including any potential changes to the terms of the Merger, could have the effect of delaying or preventing consummation of the proposed Merger.

Subject to the terms of the Merger Agreement, we have agreed to use our reasonable best efforts to take all actions necessary to consummate the Merger, including cooperating to obtain the regulatory approvals necessary to complete the Merger. Nonetheless, certain conditions to the completion of the pending Merger are not within our or Synaptics’s control, and we cannot predict when or if these conditions will be satisfied (or waived, as applicable). There can be no assurance that all required approvals will be obtained or that all closing conditions will otherwise be satisfied (or waived, if applicable), and, if all required approvals are obtained and all closing conditions are satisfied (or waived, if applicable), we can provide no assurance as to the terms, conditions and timing of such approvals or that the pending Merger will be completed in a timely manner or at all. Even if regulatory approvals are obtained, it is possible conditions will be imposed that could result in a material delay in, or the abandonment of, the pending Merger or otherwise have an adverse effect on the Company.

Failure to realize the benefits expected from the Merger could adversely affect our business, results of operations, and financial condition.

The anticipated benefits we expect from the Merger are based on projections and assumptions regarding Synaptics and our combined company’s future performance, which may not materialize as expected or which may prove to be inaccurate. In addition, Synaptics’ business may not perform as expected during the pendency of the Merger due to, among other factors, restrictions on Synaptics’ interim operations under the Merger Agreement, challenges in retaining and attracting key employees, and uncertainty in its relationships with customers, suppliers, partners and other business counterparties. Any such developments could adversely affect the business and financial performance of the combined company and reduce or delay the anticipated benefits of the Merger.

Our business, operating results and financial condition could be adversely affected if we are unable to realize the anticipated benefits from the Merger on a timely basis, if at all, including, among other things, realizing the anticipated synergies from the Merger in the anticipated amounts or within the anticipated timeframes or cost expectations, if at all. Achieving the benefits of the Merger will depend, in part, on our ability to integrate the business and operations of Synaptics successfully and efficiently with our business.

The challenges involved in this integration, which may be complex and time-consuming, include, among others, the following:

avoiding business disruptions, preserving customer and other important relationships of Synaptics and attracting new business and operational relationships;
coordinating and integrating independent research and development and engineering teams across technologies and product platforms to enhance product development while reducing costs;
integrating financial forecasting and controls, procedures and reporting cycles;
consolidating and integrating corporate, IT, finance, human resources and administrative infrastructures;
coordinating sales and marketing efforts to effectively position the combined company’s capabilities and the direction of product development;
integrating Synaptics’s systems, operations and product lines;
meeting obligations that we will have to counterparties of Synaptics that arise as a result of the change in control of Synaptics or otherwise under its commercial agreements; and
integrating employees and related HR systems and benefits, maintaining employee productivity and retaining key employees.

If we do not successfully manage these issues and the other challenges inherent in integrating a new business, then we may not achieve the anticipated benefits of the Merger on our anticipated timeframe, if at all, and our business, revenue, expenses, operating results, financial condition and stock price could be materially adversely affected.

Efforts to complete the Merger could disrupt our relationships with third parties and employees, divert management’s attention, or result in negative publicity or legal proceedings, any of which could adversely impact our operating results and ongoing business.

We have expended, and will continue to expend, significant management time and resources in an effort to complete the Merger, which may have a negative impact on our ongoing business and operations. Uncertainty regarding the outcome of the Merger and our future could disrupt our business relationships with our existing and potential customers, distributors, service providers and other business partners, who may attempt to negotiate changes in existing business relationships or consider entering into business relationships with parties other than Synaptics. Uncertainty regarding the outcome of the Merger could also adversely affect our ability to recruit and retain key personnel and other employees. The pendency of the Merger may also result in negative publicity and a negative impression of us in the financial markets, and may lead to litigation or other demands against us and our directors and officers. Even if these matters are without merit, defending against or otherwise resolving these claims can result in substantial costs and divert management time and resources. Such matters would be distracting to management and, may, in the future, require us to incur significant costs. Such matters could result in the Merger being delayed and/or enjoined by a court of competent jurisdiction, which could prevent the Merger from being completed. The occurrence of any of these events individually or in combination could have a material and adverse effect on our business, results of operations, and financial condition.

While the Merger Agreement is in effect, we are subject to restrictions on our business activities.

The Merger Agreement contains customary representations, warranties and covenants, including, among others, covenants regarding the conduct of our business during the pendency of the transactions contemplated by the Merger Agreement. These restrictions could prevent us from pursuing attractive business opportunities that may arise prior to the consummation of the Merger and could have the effect of delaying or preventing other strategic transactions. Although we may be able to pursue such activities with Synaptics’s consent (and Synaptics is required not to unreasonably withhold such consent), there is no guarantee that Synaptics will provide us with the necessary consent. In addition, repurchases of our common stock during the pendency of the Merger may be subject to restrictions under applicable law. As a result, we may determine or be required to suspend or limit repurchases under our New Share Repurchase Program during the pendency of the Merger. These limitations may prevent us from repurchasing shares of our common stock at times or prices that we would otherwise consider attractive.

As a result of the Merger, we anticipate that the scope and size of our operations and business will substantially change and will result in certain incremental risks to us, including increased competition. We may not realize the full expected benefits of the Merger*.*

We anticipate that the Merger will substantially expand the scope and size of our business by adding substantial assets and operations to our existing business. Any such future growth of our business will impose significant added responsibilities on management, including, among other things, the need to identify, recruit, train and integrate additional employees. Our senior management’s attention may be diverted from the management of our business and its daily operations to the completion of the Merger and, following the closing, the integration of Synaptics’s business. Further, the Merger could also create uncertainty for our or Synaptics’s employees and customers, particularly during the post-transaction integration process. It could also disrupt existing business relationships, make it more difficult to develop new business relationships, or otherwise negatively impact the way that we operate our business.

We also anticipate that the Merger will result in increased competition. Synaptics operates in highly competitive segments and is facing increasing competition for its products and services. These competitive pressures may result in decreased sales volumes, price reductions and/or increased operating costs, and could result in lower revenues, margins and net income for the combined company. The Merger could also result in our failure to realize expected synergies or cost savings. Our ability to manage our business and growth will require us to continue to improve our operational, financial and management controls, reporting systems and procedures. We may also encounter risks, costs and expenses associated with any undisclosed or other unanticipated liabilities and use more cash and other financial resources on integration and implementation activities than we expect. We may not be able to integrate the Synaptics business into our existing operations on our anticipated timelines or realize the full expected economic benefits of the Merger, which may have a material adverse effect on our business, operating results and financial condition. In addition, the completion of the Merger may heighten the potential adverse effects on our business, operating results or financial condition described in the risk factors disclosed in Part I, Item 1A of the 2025 Form 10-K.

The treatment of Synaptics’ indebtedness in connection with the Merger may involve repayment or assumption by us of substantial indebtedness, which could reduce our flexibility to operate our business and negatively affect our financial condition, and could result in dilution to our stockholders.

We already have substantial outstanding indebtedness. For risks related to such indebtedness, see the risks set forth in “Trends, Risks and Uncertainties Related to Our Indebtedness” in the 2025 Form 10-K.

Synaptics has outstanding 4.000% Senior Notes due 2029 (the “Synaptics Senior Notes”). At our request and at our sole cost and expense, Synaptics must use reasonable best efforts to exercise its right to redeem, discharge, defease, or make an offer to repurchase the Synaptics Senior Notes in accordance with their terms, with any such redemption, discharge, defeasance, or repurchase to be effective at the effective time of the Merger or such later time as we may request. In connection with the Merger, we currently intend to cause Synaptics to redeem and/or discharge the Synaptics Senior Notes. In addition, the Merger Agreement requires Synaptics to use its reasonable best efforts to deliver to us an executed payoff letter with respect to Synaptics’ existing $350 million senior secured revolving credit facility with Wells Fargo Bank, National Association, together with all related lien release documentation necessary to effect the release of any liens related to such facility.

Our ability to fund the repayment, redemption and/or discharge of Synaptics’ indebtedness will depend on, among other factors, prevailing market conditions and other factors beyond our control, and the repayment, redemption and/or discharge – or any such failure to do so – could materially and adversely affect our operations and financial condition.

In addition, Synaptics has outstanding 0.75% Convertible Senior Notes due 2031 (the “Synaptics Convertible Notes”). Following completion of the Merger, the Synaptics Convertible Notes will, pursuant to a supplemental indenture, become convertible into shares of our common stock rather than shares of Synaptics common stock. As a result, any future conversion of the Synaptics Convertible Notes may, depending on the settlement method, result in the issuance of a significant number of additional shares of our common stock, which may only be partially offset by the capped call transactions entered into by Synaptics concurrently with the issuance of the Synaptics Convertible Notes. Any such issuances of shares of our common stock would dilute the ownership interests of our existing stockholders.

The repayment, redemption and/or discharge of Synaptics’ existing indebtedness, our assumption of settlement obligations under the Synaptics Convertible Notes, and any dilution resulting from future conversions of the Synaptics Convertible Notes could have material and adverse effects on our business, operating results and financial condition, including, among other things:

increasing our vulnerability to changing economic, regulatory and industry conditions;
limiting our ability to compete and our flexibility in planning for, or reacting to, changes in our business and the industry;
placing us at a competitive disadvantage compared to our competitors with less indebtedness;
requiring us to dedicate a portion of our cash on hand or borrowing capacity to fund the repayment of Synaptics’ existing indebtedness, thereby reducing the availability of cash to fund our business needs;
limiting our ability to return capital (for example, through stock repurchases or dividends) to our stockholders;
limiting our ability to borrow additional funds in the future to fund growth, acquisitions, working capital, capital expenditures or other purposes;
diluting the ownership interests of our existing stockholders as a result of any future conversion of the Synaptics Convertible Notes into shares of our common stock; and
increasing the risks described under “Trends, Risks and Uncertainties Related to Our Indebtedness” in the 2025 Form 10-K.

This disclosure does not constitute a notice of redemption with respect to the Synaptics Senior Notes.

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, prospects and our proposed acquisition of Synaptics 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 2025 Form 10-K, under Part II, Item 1A. "Risk Factors" and elsewhere 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 in this Form 10-Q and in our 2025 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 July 3, 2026:


Period (1)	Total Number of Shares Purchased	Average Price Paid per Share ($)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar value of Shares that May Yet be Purchased Under the Plans or Programs (in millions) ($)
April 4, 2026 - May 1, 2026	—	$	—	—	$	5,654.4
May 2, 2026 - May 29, 2026	3,138,218	105.77		3,138,218	5,322.4
May 30, 2026 - July 3, 2026	—	—		—	5,322.4
Total	3,138,218	$	105.77	3,138,218

(1) These time periods represent our fiscal month start and end dates for the second quarter of 2026.

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 New Share Repurchase Program and, therefore, are excluded from the table above.

New Share Repurchase Program

In November 2025, the Board of Directors approved a new Share Repurchase Program (the "New Share Repurchase Program") under which the Company may repurchase up to an aggregate of $6.0 billion of the Company's common stock (exclusive of fees, commissions and other expenses). Under the New Share Repurchase Program, which does not require the Company to purchase any minimum amount of common stock or at all, the Company may repurchase shares from January 1, 2026 through December 31, 2028. The New Share Repurchase Program may be modified, suspended or terminated by the Board of Directors at any time without prior notice.

We repurchased 3.1 million shares of the Company's common stock under the New Share Repurchase Program during the quarter ended July 3, 2026. As of July 3, 2026, the authorized amount remaining under the New Share Repurchase Program was approximately $5.3 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 July 3, 2026, 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, our Group President, ISG and AMG, adopted a Rule 10b5-1 trading arrangement on May 14, 2026. Under this arrangement, a total of 15,578 shares of our common stock may be sold, subject to certain conditions, before the plan expires on May 14, 2027.

Item 6. Exhibits

EXHIBIT INDEX



Exhibit No.		Exhibit Description*****

	2.1	Agreement and Plan of Reorganization, dated as of June 25, 2026, by and among ON Semiconductor Corporation, Sonic Acquisition Corp. and Synaptics Incorporated (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K dated June 25, 2026) †

	4.1	Indenture, dated as of May 11, 2026, among ON Semiconductor Corporation, the guarantors party thereto and Computershare Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated May 12, 2026)

	4.2	Form of 0% Convertible Senior Note due 2031 (included in Exhibit 4.1 )

	10.1	Form of Confirmation for Convertible Note Hedges (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated May 12, 2026)

	10.2	Form of Confirmation for Warrants (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K dated May 12, 2026)

	31.1	Certification by CEO pursuant to Rule 13(a)-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of Sarbanes-Oxley Act of 2002 (1)

	31.2	Certification by CFO pursuant to Rule 13(a)-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of Sarbanes-Oxley Act of 2002 (1)

	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 2002 (2)

	101.INS	XBRL Instance Document (1)

	101.SCH	XBRL Taxonomy Extension Schema Document (1)

	101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document (1)

	101.DEF	XBRL Taxonomy Extension Definition Linkbase Document (1)

	101.LAB	XBRL Taxonomy Extension Label Linkbase Document (1)

	101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document (1)

	104	Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.


*			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.


(1)			Filed herewith.
(2)			Furnished herewith.

†			Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant hereby undertakes to furnish supplementally a copy of any omitted schedule upon request by the SEC.

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:	August 3, 2026	By:	/s/ THAD TRENT
			Thad Trent
			Executive Vice President and Chief Financial Officer
			(Principal Financial and Accounting Officer and officer duly authorized to sign this report)