2020 ON Semiconductor ANNUAL REPORT

1 2020ON SemiconductorANNUAL REPORTL ettertoShareholdersWeareONSemiconductorO N Semiconductoris trustedby customersfor our abilityto help solvetheir haveamarket-leadingproductportfolioand systemsexpertise that enableus to provide customerswithcompellingsolutionsfor theirmostdemanding proudofour talented and motivatedworldwide teams,extensiveintellectual property,global saleschannel,strong customerrelationships,awidelyrecognized brandand afocuson automotiveand industrial,the fastestgrowing semiconductorend markets,we areexcited abouttheopportunitiesin front of us to maximizevalue for our shareholders,customersand will comefrom gross marginexpansionand maintainingabove-market revenue growth in ourstrategicmarkets,whilebeingopportunis ticin companyis focusedon maximizingfree cash flowtode-leverour balancesheetto remainaconsolidatorin the arenow working to streamlinethe organizationand reducecomplexitythroughoutthe focusourinvestmentson our high-marginproductstargetedat the fastestgrowing believeour company s values, visionand mission will continuetoprovide opportunities for our employees tomakeadifferencein suppliersvalue our supplychain,qualityprograms,ethicalstand ards, humanrightsand environmental programs, and commitment to diversity ,EquityandInclusion(DEI).

2 Theysee this as acompetitiveadvantagewe holdand we will continueto workwith our customersand stakeholdersto turn this advantageinto ,the EthisphereInstitute,aglobal leaderin definingand advancingthe standards of ethicalbusinesspractices,has awarded ON Semiconductorwith one of the World s Most EthicalCompany ,Social and Governance(ESG)programshavebeen recognized by World Finance,Barron s,Newsweek,EcoVadis and other external Corporate SocialResponsibilityand Sustainability teamsled thecompletionof our first assessmentusingthe SustainableAccountingStandards Board(SASB)frameworkand an initialassessmentto the Task ForceonClimate-relatedFinancialDisclosur es (TCFD)framework. Theseassessmentsindicatewe have astrong foundationand we intendto continuedevelopingrobust areconstantlydrivingto developadiverse and inclusiveworkplacewhichbenefitsour companyand enablesusto successfully meetthe needsof our global stakeholders shareholders, customers, suppliers and employees.

3 Theseinitiatives contributedto ON Semiconductorbeingincludedon the BloombergGenderEqualityIndex in 2020and2021, recognized as a Fairygodboss Best Technology Company for Women and listed as a Military Friendly wouldlike to thankour worldwideteamsfor risingto the challengethis past year in drivingbusinessexcellencethroughoperatio nalefficienciesand exceptionalcustomerservice,all underour company s ethicalframework. We areexcitedas we defineand implementastrategyfor industry-leadingperformancegoingforward. We remainoptimisticfor our futureaswebuild uponour strong the BoardON SemiconductorHassaneS. El-KhouryPresidentand CEOON SemiconductorIn 2020, we donated over $ million through the ON Semiconductor Foundation and our global giving program tocommunities where we operate and where our employees live and work. We are particularly proud of the outpouring ofgenerosity from our employees and giving programs, donations, in-kind goods and other support to our Semiconductor $100$ $ $ $ $ $100$ $ $ $ $ Composite$100$ $ $ $ $ precedinggraphshowsacomparisonof cumulativetotalstockholderreturnsfor our commonstock,the NASDAQ StockMarketIndexfor the PhiladelphiaSemiconductorIndex(SOX)

4 For the past five graphassumesthe investmentof $100on December31, 2015 ,the last tradingday of cashdividendshavebeendeclaredor paid on our commonstocktradeson the NASDAQ GlobalSelectMarketand the pricesfor our commonstockusedto calculatethe stockholderreturnsset forth abovereflectthe pricesas reported by not necessarilyindicativeof closingpriceon the last tradingday of 2020was $ $0$100$300$200$500$400 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 NASDAQSOXONS emiconductorCERTAINFORWARD LOOKINGSTATEMENTSC ertain statementsinthisAnnual REPORT areforward-lookingstatementswithin the meaning of thePrivate SecuritiesLitigation ReformAct of1995. Forward-lookingstatements areoften characterized by theuse of wordssuch as believes, estimates, expects, projects, may, will, intends, plans, should, or anticipates, and similarexpressions. All forward-looking statements in thisAnnual REPORT aremadebased onON Semiconductor s current expectations,forecasts, estimates andassumptions,and involverisks, uncertainties and other factors that could causeresults or events to differ materially from those expressed in the forward-lookingstatements.

5 Among these factorsare economicconditions andmarkets (includingcurrent financial conditions), exchangerate fluctuations,risks associatedwithdecisionsto expend cashreservesfor varioususesin accordancewithONSemiconductor s capital allocation policy suchasdebtprepayment, stock repurchases or acquisitions ratherthan to retainsuchcashfor futureneeds,risks associatedwith ON Semiconductor s substantial leverage and restrictivecovenantsinONSemiconductor s debtagreements that maybeinplace from timetotime,andrisksinvolving governmental regulation. Additionalfactors that couldcauseresults to differmaterially from those projectedin the forward-looking statements arecontainedinONSemiconductor's ANNUAL ReportonForm10-K,QuarterlyReports on Form 10-Q,Current Reports on Form 8-Kand other of ON Semiconductor s filings with the SEC. Allforward-looking statementsattributabletousorpersonsactin g on our behalfare expressly qualifiedintheir entirety by thiscautionary assumesno obligation to updatesuchinformation, exceptasmay be required by STATESSECURITIES AND EXCHANGE COMMISSIONW ashington, 20549 FORM 10-K(Mark One) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020Or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934 For the transition period fromto(Commission File Number) 001-39317ON Semiconductor CORPORATION(Exact name of registrant as specified in its charter)Delaware36-3840979(State or other jurisdiction ofincorporation or organization)( EmployerIdentification No.)

6 5005 E. McDowell RoadPhoenix, AZ 85008(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 classTrading Symbol(s)Name of each exchange on which registeredCommon Stock, par value $ per shareONThe Nasdaq Stock Market LLCP referred Stock, Series B Junior Participating,Purchase RightsN/AThe Nasdaq Stock Market LLCS ecurities Registered Pursuant to Section 12(g) of the Act:NoneIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No 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 1934during the preceding 12months (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.

7 Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405of Regulation S-T ( this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).Yes No 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 growthcompany. See the definitions of large accelerated filer, accelerated filer, smaller reporting company, and emerging growth company in Rule 12b-2 of the Exchange accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company If emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new orrevised financialaccounting standards provided pursuant to Section 13(a) of the Exchange Act.

8 Indicate by check mark whether the registrant has filed a REPORT on and attestation to its management s assessment of the effectiveness of its internal control over financial reportingunder Section 404(b) of the Sarbanes-Oxley Act (15 7262(b)) by the registered public accounting firm that prepared or issued its audit No Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes No The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant was $7,783,044,394 as of July 3, 2020, based on the closing salesprice of such stock on the Nasdaq Global Select Market. Shares held by executive officers, directors and persons owning directly or indirectly more than 10% of the outstandingcommon stock (as applicable) have been excluded from the preceding number because such persons may be deemed to be affiliates of the number of shares of the registrant s common stock outstanding at February 10, 2021 was 411,881, Incorporated by ReferencePortions of the registrant s Definitive Proxy Statement relating to its 2021 ANNUAL Meeting of Stockholders, which is expected to be filed pursuant to Regulation 14A within 120days after the registrant s fiscal year ended December 31, 2020, are incorporated by reference into Part III of this Form Semiconductor CORPORATIONFORM 10-KTABLE OF CONTENTSPart IItem Overview6 Revenue Generating Activities7 Markets11 Resources14 Seasonality16 Government Regulation17 Human Capital Resources17 Executive Officers of the Registrant19 Available Information21 Item Factors21 Item Staff Comments44 Item Proceedings45 Item Safety Disclosure45 Part IIItem for Registrant s Common Equity.

9 Related Stockholder Matters and Issuer Purchases ofEquity Securities46 Item Financial Data47 Item s Discussion and Analysis of Financial Condition and Results of Operations48 Item and Qualitative Disclosures about Market Risk67 Item Statements and Supplementary Data68 Item in and Disagreements with Accountants on Accounting and Financial Disclosure68 Item and Procedures68 Item Information69 Part IIIItem , Executive Officers and Corporate Governance70 Item Compensation70 Item Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters70 Item Relationships and Related Transactions, and Director Independence70 Item Accountant Fees and Services70 Part IVItem and Financial Statement Schedules71 Item 10-K Summary80 Signatures81(See the glossary immediately following this table of contents for definitions of certain abbreviated terms)2ON Semiconductor CORPORATIONFORM 10-KGLOSSARY OF SELECTED ABBREVIATED TERMS*Abbreviated TermDefined Convertible Senior Notes due Convertible Senior Notes due Senior Notes due 2028 ACAlternating currentADASA dvanced driver assistance systemsAECA utomotive Electronics CouncilAFCIArc fault circuit interrupterAIArtificial intelligenceAmended Credit AgreementCredit Agreement, dated as of April 15, 2016, as subsequently amended, by and amongthe Company, as borrower, the several lenders party thereto, Deutsche Bank AG, NewYork Branch, as administrative agent and collateral agent, and certain other parties,providing for the Revolving Credit Facility and the Term Loan B FacilityAmended and Restated SIPON Semiconductor Corporation Amended and Restated Stock Incentive Plan, as amendedAMISAMIS Holdings, point/gatewayAptinaAptina.

10 Reality/virtual realityASCA ccounting Standards CodificationASICA pplication specific integrated circuitsASSPA pplication specific standard productASUA ccounting Standards UpdateBCDB ipolar-CMOS-DMOSCMOSC omplementary metal oxide semiconductorCSPChip scale packageDCDirect currentDFNDual-flat no-leadsDMOSD ouble diffused metal oxide semiconductorDSPD igital signal processingECLE mitter coupled logicEDIE lectronic data interfaceEEPROME lectrically erasable programmable read-only memoryEPAE nvironmental Protection AgencyESDE lectrostatic dischargeESPPON Semiconductor Corporation 2000 Employee Stock Purchase Plan, as amended3EV/HEVE lectric vehicles/hybrid electric vehiclesExchange ActSecurities Exchange Act of 1934, as amendedFairchildFairchild Semiconductor International Inc., a wholly-owned subsidiary of ONSemiconductor CorporationFASBF inancial Accounting Standards Food and Drug AdministrationFreescaleFreescale Semiconductor , nitrideGFCIG round fault circuit interrupterHVHigh voltageICIntegrated circuitIGBTI nsulated-gate bipolar transistorIoTInternet-of-thingsIPIntelle ctual propertyIPRDIn-process research and developmentLDOsLow drop out regulator controllersLEDL ight-emitting diodeLIBO RateA base rate per annum equal to the London Interbank Offered Rate as administered by theIntercontinental Exchange Benchmark AdministrationLiDARL ight detection and rangingLSIL arge scale integrationMCUM icrocontroller unitMOSFETM etal oxide Semiconductor field effect transistorMotorolaMotorola device manufacturersOEMO riginal equipment manufacturersPCPersonal computerPRPP otentially responsible partyRevolving Credit FacilityA $ billion revolving credit facility created pursuant to the Amended CreditAgreementRFRadio frequencyRSUR estricted stock unitSCI LLCS emiconductor Components Industries, LLC.