ON SEMICONDUCTOR CORP

ON Semiconductor Corporation, together with its wholly and majority-owned subsidiaries, which operate under the onsemi TM brand ("onsemi," "we," "us," "our," or the "Company"), was incorporated under the laws of the State of Delaware in 1992.

We offer intelligent power and intelligent sensing solutions that drive electrification, energy efficiency, safety, and automation in automotive, industrial, and other end-markets, including AI data center. Our intelligent power technologies enable the electrification of drivetrain in the automotive industry to allow for lighter and longer-range electric vehicles and empower 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 the increase in electronics content for 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, achieving higher range for a given battery 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. In addition, our intelligent sensing technologies are enabling robotics and humanoids.

In our other 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 new generation of AI data center processors and racks enter the market.

As of December 31, 2025, we were 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").

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.

2025 Significant Activities

Acquisitions

On January 14, 2025, we completed the acquisition of the Silicon Carbide Junction Field-Effect Transistor ("SiC JFET") technology business from Qorvo US, Inc., and certain of its subsidiaries, for $118.8 million in cash. We believe the acquisition complements our EliteSiC power portfolio within the PSG reportable segment and enables us to help address the need for high energy efficiency and power density in the AC-DC stage in power supply units for AI data centers.

On October 27, 2025, we completed the acquisition of rights to Vcore power technologies, including associated intellectual property licenses, from Aura Semiconductor enhancing our power management portfolio. The total purchase consideration is up to $144 million, subject to customary purchase price adjustments, with $7 million paid in cash at close. Of the total purchase price, $72 million is payable upon acceptance and delivery of specified products and the remaining $72 million is contingent upon the achievement of certain revenue milestones through 2030.

2025 Manufacturing Realignment Program

During the first quarter of 2025, we announced restructuring and cost reduction initiatives based on an evaluation of our operating structure, business strategy, manufacturing technologies and internal capabilities to realign our internal manufacturing capacity and capabilities with anticipated long-term needs.

We incurred total severance costs and related benefit expenses of $67.1 million related to the termination of approximately 2,400 employees. Additionally, we recorded non-cash impairment charges of $496.0 million during the year ended December 31, 2025 related to previous investments in manufacturing equipment at certain manufacturing facilities pursuant to held-for-sale accounting guidance. Other charges of $103.9 million for the year ended December 31, 2025, comprised of other exit costs, accelerated depreciation and contract termination costs, were incurred as part of the program. The total of the aforementioned costs was included within Restructuring, Asset Impairments and Other, Net in the Consolidated Statement of Operations.

We also recorded $268.2 million relating to excess and obsolete inventory charges, of which $37.9 million and $230.3 million related to inventory primarily considered work in progress within the PSG and ISG reportable segments, respectively. Additionally, we recorded $45.4 million related to write-off of consumables, manufacturing supplies and obligations for certain unfulfilled purchase commitments due to the manufacturing capacity reduction actions associated with the program. These charges were recorded within Cost of revenue in the Consolidated Statement of Operations.

For additional information, see Note 7: ''Restructuring, Asset Impairments and Other, net'' in the notes to our audited consolidated financial statements included elsewhere in this Form 10-K.

We continue to evaluate our employee workforce composition (both employee positions and locations) and manufacturing capacity and footprint for potential operational improvements and efficiencies.

Share Repurchases

During the year ended December 31, 2025, we repurchased approximately 27.9 million shares of our common stock for an aggregate purchase price of approximately $1,375.0 million, excluding fees, commissions and excise taxes. See Note 10: ''Earnings Per Share and Equity'' in the notes to our audited consolidated financial statements included elsewhere in this Form 10-K for additional information.

Repayment of Revolver

On December 31, 2025, we repaid $375.0 million that was outstanding on the Revolving Credit Facility. As of December 31, 2025, we had approximately $1.5 billion available under the Revolving Credit Facility for future borrowings, except for amounts utilized for the letters of credit.