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.

ON Semiconductor Corporation (NASDAQ:ON) Q2 2022 Earnings Conference Call August 1, 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 Chris Danely - Citi Vivek Arya - Bank of America Toshiya Hari - Goldman Sachs William Stein - Truist Rajvindra Gill - Needham & Company Gary Mobley - Wells Fargo J ...

ON Semiconductor Corporation (NASDAQ:ON) BofA Securities 2022 Global Technology Conference Transcript June 8, 2022 5:20 PM ET Executives Hassane El-Khoury - President and Chief Executive Officer Thad Trent - Chief Financial Officer Analysts Vivek Arya - Bank of America Vivek Arya …joining us. I am Vivek Arya. I cover semis and semi-cap equipment at BofA Securities. And I’m absolutely delighted to have the team from onsemi join us, Hassane El-Khoury, the President and CEO; and Thad Trent, Executive VP and CF ...

ON Semiconductor Corporation (NASDAQ:ON) Q1 2022 Earnings Conference Call May 2, 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 Chris Danley - Citi Vivek Arya - Bank of America Toshiya Hari - Goldman Sachs William Stein - Truist Securities Harsh Kumar - Piper Sandler Matt Ramsay - Cowen Harlan ...