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 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. We are utilizing our extensive range of power technologies to help address the growing power demands of AI and data centers. 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. 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.

As of December 31, 2024, 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"). During the first quarter of 2024, we reorganized the existing divisions within certain of our operating and reportable segments and renamed the Advanced Solutions Group ("ASG") reportable segment to AMG. See Note 3: ''Segments and Revenue'' in the notes to our audited consolidated financial statements included elsewhere in this Form 10-K for additional information regarding the segment reorganization.

Business Strategy Developments

Our primary focus continues to be on revenue growth 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 with new product development and maintain gross margins through efficiencies. 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.

2025 Acquisition

On January 14, 2025, we completed the previously announced 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, subject to working capital adjustments. 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.

2024 Activities

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 continued our business realignment efforts during 2024. Under this plan, approximately 1,200 employees were notified of their employment termination and around 300 additional employees were reassigned or asked to relocate to another site. During the year ended December 31, 2024, we recorded severance costs, asset impairments and other related charges of approximately $75.7 million, $37.8 million and $16.3 million, respectively. See Note 7: ''Restructuring, Asset Impairments and Other Charges, net'' in the notes to our audited consolidated financial statements included elsewhere in this Form 10-K for additional information. We continue to evaluate employee positions and locations for potential operating improvements and efficiencies.

Share Repurchases

During the year ended December 31, 2024, we repurchased approximately 9.1 million shares of our common stock for an aggregate purchase price of approximately $650 million, which excludes 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.

2023 Activities

2023 Business Realignment

During 2023, we realigned our operating models in AMG (formerly "ASG"), Corporate information technology ("IT") organization and certain manufacturing locations in order to streamline our operations, achieve organizational efficiencies and consolidate resources into fewer, common sites across the world to align with the next phase of our multi-year "Fab Right" manufacturing strategy. Under this plan, approximately 1,900 employees were notified of their employment termination. We incurred severance costs and related charges of approximately $59.1 million related to these actions in 2023. See Note 7: ''Restructuring, Asset Impairments and Other Charges, net'' in the notes to our audited consolidated financial statements included elsewhere in this Form 10-K for additional information.

1.625% Notes maturity and repayment

On October 16, 2023, we repaid $119.6 million of the remaining outstanding principal amount of the 1.625% Notes in cash and settled the excess over the principal amount by issuing 4.5 million shares of our common stock. Under the previously executed bond hedge agreements, we also repurchased an equivalent number of shares of our common stock, for no additional consideration, to effectively offset the issuance of shares.

Credit Agreement

On June 22, 2023, we entered into a new Credit Agreement to replace the Revolver due 2024, which was set to mature on June 28, 2024. We drew $375.0 million against the Revolving Credit Facility and repaid the entire outstanding balance under the Revolver due 2024. We had previously repaid $125.0 million of the outstanding balance under the Revolver due 2024 during the first quarter of 2023.

0.50% Convertible Senior Notes due 2029

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

2022 Acquisitions and Divestitures

On December 31, 2022, we completed the acquisition of EFK along with certain other assets and liabilities from GLOBALFOUNDRIES U.S. Inc. ("GFUS") for total consideration of $406.3 million. We paid GFUS $236.3 million, $100.0 million and $70.0 million during 2023, 2020 and 2019, respectively.

During 2022, in line with our "Fab Right" strategy, we divested four wafer manufacturing facilities in Oudenaarde, Belgium, South Portland, Maine, Pocatello, Idaho and Niigata, Japan. We entered into wafer supply agreements with the respective buyers of these facilities to help minimize disruptions in our ability to meet customer demand for our products.

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