UNITED STATES SECURITIES and EXCHANGE COMMISSION Washington, D.C
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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, 2020 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) Delaware 36-3840979 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 5005 E. McDowell Road Phoenix, 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 class Trading Symbol(s) Name of each exchange on which registered Common Stock, par value $0.01 per share ON The Nasdaq Stock Market LLC Preferred Stock, Series B Junior Participating, Purchase Rights N/A The Nasdaq Stock Market LLC Securities Registered Pursuant to Section 12(g) of the Act: None Indicate 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 1934 during the preceding 12 months (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. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of 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 growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. Large 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 or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ 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 reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes ☒ 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 sales price 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 outstanding common stock (as applicable) have been excluded from the preceding number because such persons may be deemed to be affiliates of the registrant. The number of shares of the registrant's common stock outstanding at February 10, 2021 was 411,881,071. Documents Incorporated by Reference Portions 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 120 days after the registrant's fiscal year ended December 31, 2020, are incorporated by reference into Part III of this Form 10-K. 1 ON SEMICONDUCTOR CORPORATION FORM 10-K TABLE OF CONTENTS Part I Item 1. Business 5 Business Overview 5 Revenue Generating Activities 6 Markets 9 Resources 12 Seasonality 14 Government Regulation 14 Human Capital Resources 15 Executive Officers of the Registrant 16 Available Information 18 Item 1A. Risk Factors 18 Item 1B. Unresolved Staff Comments 36 Item 2. Properties 37 Item 3. Legal Proceedings 37 Item 4. Mine Safety Disclosure 37 Part II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 37 Item 6. Selected Financial Data 38 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 39 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 54 Item 8. Financial Statements and Supplementary Data 55 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 55 Item 9A. Controls and Procedures 55 Item 9B. Other Information 56 Part III Item 10. Directors, Executive Officers and Corporate Governance 56 Item 11. Executive Compensation 56 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 57 Item 13. Certain Relationships and Related Transactions, and Director Independence 57 Item 14. Principal Accountant Fees and Services 57 Part IV Item 15. Exhibits and Financial Statement Schedules 57 Item 16. Form 10-K Summary 65 Signatures 66 (See the glossary immediately following this table of contents for definitions of certain abbreviated terms) 2 ON SEMICONDUCTOR CORPORATION FORM 10-K GLOSSARY OF SELECTED ABBREVIATED TERMS* Abbreviated Term Defined Term 1.00% Notes 1.00% Convertible Senior Notes due 2020 1.625% Notes 1.625% Convertible Senior Notes due 2023 3.875% Notes 3.875% Senior Notes due 2028 AC Alternating current ADAS Advanced driver assistance systems AEC Automotive Electronics Council AFCI Arc fault circuit interrupter AI Artificial intelligence Amended Credit Agreement Credit Agreement, dated as of April 15, 2016, as subsequently amended, by and among the Company, as borrower, the several lenders party thereto, Deutsche Bank AG, New York Branch, as administrative agent and collateral agent, and certain other parties, providing for the Revolving Credit Facility and the Term Loan "B" Facility Amended and Restated SIP ON Semiconductor Corporation Amended and Restated Stock Incentive Plan, as amended AMIS AMIS Holdings, Inc. AP/Gateway Access point/gateway Aptina Aptina, Inc. AR/VR Augmented reality/virtual reality ASC Accounting Standards Codification ASIC Application specific integrated circuits ASSP Application specific standard product ASU Accounting Standards Update BCD Bipolar-CMOS-DMOS CMOS Complementary metal oxide semiconductor CSP Chip scale package DC Direct current DFN Dual-flat no-leads DMOS Double diffused metal oxide semiconductor DSP Digital signal processing ECL Emitter coupled logic EDI Electronic data interface EEPROM Electrically erasable programmable read-only memory EPA Environmental Protection Agency ESD Electrostatic discharge ESPP ON Semiconductor Corporation 2000 Employee Stock Purchase Plan, as amended EV/HEV Electric vehicles/hybrid electric vehicles Exchange Act Securities Exchange Act of 1934, as amended Fairchild Fairchild Semiconductor International Inc., a wholly-owned subsidiary of ON Semiconductor Corporation FASB Financial Accounting Standards Board FDA U.S. Food and Drug Administration Freescale Freescale Semiconductor, Inc. GaN Gallium nitride 3 GFCI Ground fault circuit interrupter HV High voltage IC Integrated circuit IGBT Insulated-gate bipolar transistor IoT Internet-of-things IP Intellectual property IPRD In-process research and development LDOs Low drop out regulator controllers LED Light-emitting diode LIBO Rate A base rate per annum equal to the London Interbank Offered Rate as administered by the Intercontinental Exchange Benchmark Administration LiDAR Light detection and ranging LSI Large scale integration MCU Microcontroller unit MOSFET Metal oxide semiconductor field effect transistor Motorola Motorola Inc. ODM Original device manufacturers OEM Original equipment manufacturers PC Personal computer PRP Potentially responsible party Revolving Credit Facility A $1.97 billion revolving credit facility created pursuant to the Amended Credit Agreement RF Radio frequency RSU Restricted stock unit SCI LLC Semiconductor Components Industries, LLC, a wholly-owned subsidiary of ON Semiconductor Corporation SEC Securities and Exchange Commission Securities Act Securities Act of 1933, as amended SensL SensL Technologies Ltd. SiC Silicon carbide SiPM Silicon photomultipliers SoC System on chip SPAD Single photon avalanche diode arrays Term Loan "B" Facility A $2.4 billion term loan "B" facility created pursuant to the Amended Credit Agreement UPS Uninterruptible power supplies VCORE Voltage core WBG Wide band gap Wi-Fi Wireless radio technologies compliant with Institute of Electrical and Electronics Engineers Standard 802.11b and commonly used in wireless local area networking devices X4DFN 01005 Dual-flat no-leads 0.445 x 0.24 x 0.18 mm package * Terms used, but not defined, within the body of the Form 10-K are defined in this Glossary. 4 PART I Item 1. Business Business Overview ON Semiconductor Corporation, together with its wholly and majority-owned subsidiaries ("ON Semiconductor,"