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United States securities and exchange commission logo
August 24, 2023
Thad Trent
Chief Financial Officer
ON Semiconductor Corporation
5701 N. Pima Road
Scottsdale, Arizona 85250
Re: ON Semiconductor
Corporation
Form 10-K for the
Fiscal Year Ended December 31, 2022
Filed February 6,
2023
Form 10-Q for the
Quarterly Period Ended June 30, 2023
Filed July 31, 2023
File No. 001-39317
Dear Thad Trent:
We have limited our review of your filing to the financial
statements and related
disclosures and have the following comments. In some of our comments, we
may ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K for the Fiscal Year Ended December 31, 2022
Note 3. Revenue and Segment Information, page 62
1. Please expand to
disclose how revenue is recognized from manufacturing services and the
total amount or
percentage of consolidated sales. Also, we note you provide
disaggregated revenue
information by geographic location, by sales channel, as well as by
reportable segment, and
revenue by product sales versus product development
agreements. We note
from your recent earnings call transcripts, you discuss revenue by
end market, such as
automotive and industrial, along with type of revenue product sales,
such as silicon
carbide, intelligent power and intelligent sensing. Additionally, your
earnings release
furnished on Form 8-K on July 31, 2023 includes three prominent bullets
at the top of the
release that disclose revenue for automotive and industrial, and the
change in revenue for
silicon carbide. Please tell us the consideration given to further
Thad Trent
ON Semiconductor Corporation
August 24, 2023
Page 2
expanding your revenue disaggregation disclosures to also present
revenue along the
aforementioned lines. Your response should address ASC 606-10-55-89
through 55-91,
as well as ASC 280-10-50-40.
Form 10-Q for the Quarterly Period Ended June 30, 2023
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations, page 28
2. We note from your disclosure on page 32 that gross profit decreased by
$87.5 million for
the six months ended June 30, 2023 compared to the six months ended
July 1, 2022 and
gross margin decreased by 2.5% from 49.6% for the six months ended
July 1, 2022 to
47.1% for the six months ended June 30, 2023. You also disclose that
the decline in both
gross profit and gross margin was primarily driven by start-up and
ramp-up costs at our
EFK location and new products. However, we also note from the table
above these
disclosures that gross profit for the PSG segment and the ISG segment
increased by 3%
and 25% respectively, and the ASG segment gross profit decreased by
25%. Margins
decreased by 1% and 8% for PSG and ASG, respectively, and increased
for ISG by
3%. In this regard, your disclosure should be revised to explain and
quantify the amount
of related expenses of start-up and ramp-up costs attributable to
increase costs at your
EFK location as well as the impact from new products. Further, your
disclosure should be
enhanced to explain and quantify the factors responsible for the
changes in gross profit for
each segment. This would include the increases in gross profit, as
well as the offsetting
significant decrease. Please revise future filings accordingly.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
You may contact Beverly Singleton at (202) 551-3328 or Claire Erlanger at
(202) 551-
3301 with any questions.
FirstName LastNameThad Trent Sincerely,
Comapany NameON Semiconductor Corporation
Division of
Corporation Finance
August 24, 2023 Page 2 Office of
Manufacturing
FirstName LastName