ON Semiconductor Corporation (NASDAQ:ON) Q4 2022 Earnings Conference Call February 6, 2023 9:00 AM ET Company Participants Parag Agarwal - Vice President of Investor Relations & Corporate Development Hassane El-Khoury - President & Chief Executive Officer Thad Trent - Chief Financial Officer Conference Call Participants Ross Seymore - Deutsche Bank Vivek Arya - Bank of America Christopher Danely - Citigroup Toshiya Hari - Goldman Sachs Harsh Kumar - Piper Sandler Christopher Caso - Credit Suisse Matthe ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 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) (State or other jurisdiction of incorpora ...

ON Semiconductor Corporation Conference Call Summary Company Overview - **Company**: ON Semiconductor Corporation (NASDAQ:ON) - **Date**: January 5, 2023 - **Participants**: - Hassane El-Khoury - President and CEO - Thad Trent - CFO - Harlan Sur - JPMorgan Analyst Key Industry Insights Automotive and Industrial Markets - The company has a strong focus on automotive and industrial markets, which are expected to outgrow the general market due to trends like electrification and Advanced Driver Assistance Systems (ADAS) [4][6] - The design win funnel in automotive has been a significant driver of future growth, with expectations of continued growth in these segments [4][6] - The automotive segment is projected to grow at a compound annual growth rate (CAGR) of 17%, with electrification driving a 30% CAGR in xEV production over the next three years [21][22] Demand Trends and Market Dynamics - Demand trends began to decelerate in Q2 2022, particularly in consumer-focused markets, but automotive and industrial segments remain strong, accounting for about two-thirds of revenue [5][6] - The company has proactively managed inventory and production levels to navigate market fluctuations, with a focus on long-term supply agreements (LTAs) that provide stability [8][9][20] Long-Term Supply Agreements (LTAs) - LTAs are legally binding agreements that ensure pricing and volume commitments from customers, providing a stable revenue outlook even in fluctuating demand environments [9][10][20] - The company has increased its LTAs to a total of $14 billion, which enhances strategic partnerships and visibility into customer demand [13][14] Financial Performance and Projections Revenue and Margin Outlook - The company anticipates exiting non-core revenue streams, which have lower gross margins, to focus on higher-margin products, with expectations of improved overall margins as a result [45][46] - The exit from non-core products is expected to be more pronounced in the second half of 2023, allowing for a reallocation of resources to higher-value segments [46] Silicon Carbide Technology - ON Semiconductor has seen significant growth in its silicon carbide (SiC) revenues, with a target of reaching $1 billion in SiC revenues in 2023 [23][24] - The company is leveraging its extensive experience in power semiconductors to enhance its SiC offerings, which are critical for automotive and industrial applications [28][29] Additional Insights Industrial Market Trends - The industrial segment is driven by long-term trends in energy infrastructure, factory automation, and medical applications, which are expected to remain resilient even in weaker macroeconomic conditions [40][42][44] - The company has established LTAs with eight of the top ten energy renewable companies, indicating strong market positioning [43] Competitive Advantages - ON Semiconductor's leadership in IGBT and MOSFET technologies provides a competitive edge in the power semiconductor market, facilitating cross-selling opportunities and system-level solutions for customers [28][33][36] Manufacturing and Capacity Management - The company is focused on internalizing substrate supply for SiC to ensure reliability and support customer ramps, with a goal of achieving majority internal supply by the end of 2023 [39] Conclusion - ON Semiconductor is well-positioned for growth in the automotive and industrial sectors, supported by strategic LTAs, a strong design win pipeline, and a focus on high-margin products. The company is navigating market challenges effectively while leveraging its technological expertise to drive future revenue growth.

ON Semiconductor Corporation Conference Call Summary Company Overview - **Company**: ON Semiconductor Corporation (NASDAQ:ON) - **Date**: December 6, 2022 - **Participants**: - Hassane El-Khoury - CEO - Thad Trent - CFO - Joe Moore - Morgan Stanley Industry Insights Automotive Sector - **Strength in Automotive**: The automotive sector is experiencing strength due to the electrification of vehicles, which is expected to continue for the next decade as more OEMs introduce electrification platforms [4][5] - **Autonomous Driving**: Increased penetration of cameras in vehicles is driving growth in the automotive business, particularly in autonomous driving technologies [4] - **Long-Term Supply Agreements (LTSA)**: The company has established LTSAs with OEMs, which are expected to provide stability and predictability in demand [16][22] Industrial Sector - **Mixed Performance**: The industrial side shows mixed results, with softness in consumer-tied segments like power tools, while factory automation and renewable energy remain strong [5] - **Growth Areas**: Continued growth is anticipated in industrial automation and renewable energy, linked to automotive trends [5] Consumer and Compute Markets - **Softness Observed**: The consumer and compute markets are experiencing softness, consistent with trends observed by peers in the industry [5] Business Strategy Portfolio Optimization - **Exiting Non-Value Businesses**: The company has reduced $277 million in business deemed non-sustainable, with an additional $400 million to $450 million expected to be exited [6][9] - **Criteria for Sustainability**: The focus is on maintaining businesses that provide differentiated value and margin expansion [8] Margin Expectations - **Gross Margin Target**: The company aims to maintain a gross margin of 48% to 50%, despite headwinds from new investments in silicon carbide [11][39] - **Silicon Carbide Growth**: Significant investments are being made in silicon carbide, with expectations of achieving scale by the end of 2023 [11][33] Market Dynamics Long-Term Supply Agreements - **Structure of LTSA**: LTSAs are structured as take-or-pay agreements, providing a framework for volume and pricing commitments [16][17] - **Duration and Enforceability**: These agreements typically extend four to five years, with some lasting up to eight years, and are legally binding [17][18] Customer Behavior - **Proactive Engagement**: Proactive customers are engaging in LTSAs to ensure supply chain stability, moving away from traditional inventory practices [22][24] Technological Advancements ADAS and EVs - **ADAS Market Share**: The company holds an 80% market share in ADAS, with expectations for increased camera content in vehicles [30][46] - **Silicon Carbide Leadership**: The company aims for $1 billion in silicon carbide revenue, supported by LTSAs and significant capacity expansion [31][32] Competitive Differentiation - **Imaging Technology**: The company’s imaging technology is tailored for automotive applications, providing advantages in high dynamic range and LED flicker mitigation [46][49] - **Efficiency in Silicon Carbide**: The combination of device and packaging efficiency in silicon carbide products is a key competitive advantage [50] Conclusion - **Strategic Execution**: The company remains committed to its strategic plan, focusing on exiting non-value businesses, maintaining margins, and leveraging long-term agreements to navigate market challenges [13][39] - **Future Outlook**: Continued growth is anticipated in the automotive and industrial sectors, driven by technological advancements and strategic partnerships [4][5][11]

ON Semiconductor Corporation (NASDAQ:ON) Credit Suisse 26th Annual Technology Conference Transcript November 29, 2022 1:40 PM ET Executives Hassane El-Khoury - Chief Executive Officer Thad Trent - Chief Financial Officer Analysts Unidentified Analyst [Started Abruptly] Credit Suisse Semiconductor Analyst. Our next presentation is ON Semiconductor. It’s a home game for you guys, just down the block. With us for ON -- from ON is Hassane El-Khoury, CEO; and Thad Trent, CFO. So, gentlemen, thanks for attending. ...

ON Semiconductor Corporation (NASDAQ:ON) Q3 2022 Earnings Conference Call October 31, 2022 9:00 AM ET Company Participants Parag Agarwal - Vice President of Investor Relations & Corporate Development Hassane El-Khoury - President & Chief Executive Officer Thad Trent - Chief Financial Officer Conference Call Participants Ross Seymore - Deutsche Bank Christopher Danely - Citigroup Vivek Arya - Bank of America Joshua Buchalter - Cowen and Company Toshiya Hari - Goldman Sachs Rajvindra Gill - Needham & Compa ...

ON Semiconductor Corporation Conference Call Summary Company Overview - **Company**: ON Semiconductor Corporation (NASDAQ:ON) - **Event**: Citi 2022 Global Technology Conference - **Date**: September 8, 2022 - **Participants**: - Hassane El-Khoury - CEO - Chris Danely - Citigroup Semiconductor Analyst Key Industry Insights Silicon Carbide Market - **Growth Drivers**: The growth in silicon carbide is primarily driven by the megatrend of electrification, which includes not only electric vehicles (EVs) but also charging infrastructure and renewable energy integration [3][5][19] - **Total Addressable Market (TAM)**: The automotive sector represents the largest TAM for silicon carbide, but there is significant growth potential in adjacent markets such as industrial applications [3][19] - **Vertical Integration**: ON Semiconductor is the only fully vertically integrated silicon carbide manufacturer, which enhances supply assurance and allows for better control over production processes [9][11] Competitive Landscape - **Market Position**: ON Semiconductor has established a strong market position through strategic investments and acquisitions, such as the acquisition of GTAT, which supports their silicon carbide production capabilities [7][21] - **Competitors**: Key competitors include Infineon, STMicroelectronics, and Wolfspeed, each with their strengths and weaknesses in the silicon carbide space [22][23] Financial Performance and Projections Revenue and Margins - **Committed Revenue**: ON Semiconductor has $4 billion in committed revenue, with expectations to achieve over $1 billion in silicon carbide revenue by 2023 [12][50] - **Gross Margin Expectations**: The company anticipates that silicon carbide will transition from being dilutive to accretive to corporate margins by 2024, contingent on scaling production and improving pricing strategies [27][29] Capacity and Production - **Capacity Management**: The company is optimizing its manufacturing footprint to enhance capacity without incurring excessive capital expenditures. This includes moving existing production lines to more efficient fabs [44][45] - **Lead Times and Shortages**: ON Semiconductor is addressing lead time issues through long-term supply agreements (LTSAs) with customers, which help mitigate risks associated with supply chain disruptions [41][62] Strategic Initiatives Long-Term Supply Agreements (LTSAs) - **Purpose**: LTSAs are designed to provide customers with supply assurance and help ON Semiconductor manage capacity investments more effectively [15][41] - **Customer Engagement**: The company emphasizes the importance of maintaining strong relationships with customers while navigating pricing and supply challenges [62] Market Trends - **EV Penetration**: The penetration of EVs is expected to increase significantly, with projections of 50% market share by 2028, which will drive demand for silicon carbide and related technologies [32][37] Additional Insights - **Technology Differentiation**: The competitive advantage lies in ON Semiconductor's ability to provide superior technology and packaging solutions, which are critical for customer design wins [11][12] - **Market Dynamics**: The semiconductor market is expected to grow, with enough demand to support multiple players without leading to overcapacity in the near term [23][32] This summary encapsulates the key points discussed during the conference call, highlighting ON Semiconductor's strategic positioning in the silicon carbide market, financial outlook, and competitive landscape.

ON Semiconductor Corporation Conference Call Summary Company Overview - **Company**: ON Semiconductor Corporation (NASDAQ:ON) - **Date**: August 31, 2022 - **Participants**: - Hassane El-Khoury - President and CEO - Thad Trent - CFO - Ross Seymore - Deutsche Bank Key Industry Insights - **Market Demand**: - Weakness observed in consumer markets and client compute sectors, but backlog remains strong, indicating ongoing demand in other markets [3][4] - Automotive and industrial sectors show strong demand, with OEMs still behind on production plans due to supply chain issues [4][5] - Lead times for automotive products are currently around two years, indicating pent-up demand [4] - **Product Strategy**: - The company has proactively reduced wafer starts to manage inventory and avoid excess supply in non-strategic markets [3] - Automotive and industrial segments now account for 66% of revenue, reflecting a strategic shift away from non-core markets [8] Financial Performance - **Revenue Transformation**: - The company has successfully redirected capacity away from non-strategic markets, resulting in increased revenue from core markets [8][9] - Gross margins have improved significantly, with a target raised from 45% to higher levels due to a favorable product mix [9][10] - **Long-Term Supply Agreements (LTSAs)**: - LTSAs are structured as take-or-pay agreements, providing volume and price predictability, which enhances revenue stability [13][14] - The company has seen increased customer commitment under LTSAs, with customers requesting additional parts and longer contract durations [23][24] Silicon Carbide Market - **Growth Projections**: - The company anticipates exceeding a $1 billion run rate in silicon carbide revenue, with a committed revenue pipeline of $4 billion over three years [29][30] - The market for silicon carbide is expanding rapidly, driven by the demand for EVs and fast charging solutions [35][36] - **Competitive Advantage**: - ON Semiconductor differentiates itself through advanced device and packaging technology, ensuring high performance in silicon carbide applications [40] - The company emphasizes supply assurance, which is critical for customers in the EV market to avoid production delays [41] Operational Excellence - **Cost Management**: - The company is focused on maintaining margins despite headwinds from new capacity and foundry services, with a target margin range of 48% to 50% [46][47] - Operational improvements have been implemented across the organization, contributing to enhanced profitability [58] Future Outlook - **CapEx and CHIPS Act**: - The company plans to leverage the CHIPS Act for future investments, aligning with its growth strategy in North American manufacturing [52][54] - Ongoing investments are expected to support capacity expansion and technological advancements [53] - **ADAS and Image Sensors**: - The image sensor business is positioned for growth, with expectations of doubling the number of cameras per vehicle over the next five years, driving revenue growth in the automotive sector [58][59] Conclusion - ON Semiconductor is navigating market challenges effectively, focusing on strategic growth areas such as automotive and industrial sectors, while leveraging long-term agreements to stabilize revenue. The company is well-positioned to capitalize on the expanding silicon carbide market and the increasing demand for advanced automotive technologies.