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Company grows revenues by 3 percent and reduces loss per share from prior quarter

PHOENIX, Ariz. – Oct. 29, 2003 – ON Semiconductor Corporation (NASDAQ: ONNN) today announced that total revenues in the third quarter of 2003 were $265 million, an increase of 3 percent from the second quarter of 2003. During the third quarter of 2003, the company reported a net loss of $16 million, or $0.10 per share that included a net gain of $3.3 million, or $0.02 per share from restructuring, asset impairments and other and a loss on debt prepayment of $2.9 million, or $0.02 per share. During the second quarter of 2003, the company reported a net loss of $58 million, or $0.34 per share that included a net charge of $35 million, or $0.20 per share of restructuring, asset impairments and other.

On a mix adjusted basis, average selling prices in the third quarter of 2003 were down approximately 3.5 percent from the second quarter of 2003. This decline in average selling prices combined with a change in sales mix resulted in a slight decline in the company’s third quarter 2003 gross margin to 28.0 percent from 28.6 percent in the second quarter of 2003.

EBITDA for the third quarter of 2003 was $51 million and included the net gain of $3.3 million from restructuring, asset impairment and other and the $2.9 million loss on debt prepayment. EBITDA for the second quarter of 2003 was $20 million and included the net charge of $35 million from restructuring, asset impairments and other. A reconciliation of this non-GAAP financial measure to the company’s net loss and net cash provided by operating activities prepared in accordance with U.S. GAAP is set out in the attached schedule.

The net gain of $3.3 million in restructuring, asset impairments and other for the third quarter of 2003 included a $4.6 million gain on the sale of the company’s assembly and test facility in Guadalajara, Mexico offset by approximately $1.3 million of net restructuring charges.

“During the third quarter we saw an improving business environment with increased bookings and backlog,” said Keith Jackson, ON Semiconductor president and CEO. “While we are hopeful that the business environment will continue to improve, we are not relying on end market growth to improve our results. We continue to take the necessary steps to enhance our competitiveness such as improving our manufacturing efficiency, improving our customer support systems and focusing on the rapidly growing markets of Asia.”

FOURTH QUARTER 2003 OUTLOOK
“Based upon booking trends, backlog levels and estimated turns levels, we anticipate that total revenues will be up by 2 to 3 percent sequentially in the fourth quarter,” Jackson said. “Backlog levels at the beginning of the fourth quarter of 2003 were up from backlog levels at the beginning of the third quarter of 2003 and represented between 80 and 85 percent of our anticipated fourth quarter revenues. While we believe that we can grow revenue in the fourth quarter, we expect that our gross margins will remain roughly flat as compared to the third quarter.”

POTENTIAL ACCOUNTING CHANGE
In May 2003, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 150, Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity (SFAS 150), and ON Semiconductor is awaiting interpretive guidance from the FASB that is expected within the next few days. The company expects that this guidance may include a deferral of the effective date of SFAS 150 with respect to minority interests of finite-lived entities such as its investment in Leshan-Phoenix Semiconductor Limited (Leshan), which has a 50-year life under the terms of the joint venture agreement. Should the existing provisions of SFAS 150 not be changed and the required implementation date not be delayed, the company anticipates reclassifying the minority interest in Leshan as a long-term liability in its consolidated balance sheet as of October 3, 2003 that will be included in the company’s Form 10-Q for the third quarter. Additionally, ON Semiconductor anticipates adjusting the carrying value of such minority interest to its estimated liquidation value as of the beginning of the third quarter and classifying any related non-cash charge or credit as the cumulative effect of an accounting change in the company’s consolidated statement of operations. Subsequent changes in the related estimated liquidation value will be charged or credited to income each period.

The minority interest in Leshan had a carrying value of approximately $25 million as of October 3, 2003 under the previous method of accounting. Due to complexities involved in valuing the Leshan minority interest, the company has not completed its estimate of the related liquidation value as of either the beginning or end of the third quarter. While the impact is currently indeterminable, ON Semiconductor does not expect that it will be material to its consolidated financial position as of October 3, 2003. Additionally, any related impact on the company’s consolidated statement of operations would be limited to a non-cash charge or credit.

TELECONFERENCE
ON Semiconductor will hold a conference call for the financial community at 5 p.m. Eastern time (EST) today to discuss the third quarter results. The company will provide a real-time audio broadcast of the teleconference on the Investor Relations page of its website at https://www.onsemi.com. The webcast will be available for 30 days following the conference call.

About ON Semiconductor
ON Semiconductor (Nasdaq: ONNN) offers an extensive portfolio of power and data management semiconductors and standard semiconductor components that address the design needs of today’s sophisticated electronic products, appliances and automobiles. For more information visit ON Semiconductor’s website at https://www.onsemi.com.

Financial Statements

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ON Semiconductor and the ON Semiconductor logo are registered trademarks of Semiconductor Components Industries, LLC. All other brand and product names appearing in this document are registered trademarks or trademarks of their respective holders. Although the company references its website in this news release, such information on the website is not to be incorporated herein.

This news release includes “forward-looking statements” as that term is defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact are statements that could be deemed forward-looking statements and are often characterized by the use of words such as “believes,” “expects,” “estimates,” “projects,” “may,” “will,” “intends,” “plans,” or “anticipates,” or by discussions of strategy, plans or intentions. In this news release, forward-looking information relates to fourth quarter 2003 revenues, fourth quarter 2003 gross margins, bookings trends, backlog levels, estimated turns levels and similar matters. All forward-looking statements in this news release are made based on management's current expectations and estimates, which involve risks, uncertainties and other factors that could cause results to differ materially from those expressed in forward-looking statements. Among these factors are changes in overall economic conditions, the cyclical nature of the semiconductor industry, changes in demand for our products, changes in inventories at our customers and distributors, technological and product development risks, availability of raw materials, competitors' actions, pricing and gross margin pressures, loss of key customers, order cancellations or reduced bookings, changes in manufacturing yields, control of costs and expenses, significant litigation, risks associated with acquisitions and dispositions, risks associated with our substantial leverage and restrictive covenants in our debt agreements, risks associated with our international operations, the threat or occurrence of international armed conflict and terrorist activities both in the United States and internationally and risks involving environmental or other governmental regulation. Additional factors that could affect the company's future operating results are described in our Form 10-K for the year ended December 31, 2002 under the caption “Trends, Risks and Uncertainties” in the MD&A section, and other factors are described from time to time in our SEC filings. Readers are cautioned not to place undue reliance on forward-looking statements. We assume no obligation to update such information.

About onsemi

onsemi (Nasdaq: ON) is driving disruptive innovations to help build a better future. With a focus on automotive and industrial end-markets, the company is accelerating change in megatrends such as vehicle electrification and safety, sustainable energy grids, industrial automation, and 5G and cloud infrastructure. With a highly differentiated and innovative product portfolio, onsemi creates intelligent power and sensing technologies that solve the world’s most complex challenges and leads the way in creating a safer, cleaner, and smarter world.

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onsemi and the onsemi logo are trademarks of Semiconductor Components Industries, LLC. All other brand and product names appearing in this document are registered trademarks or trademarks of their respective holders. Although the Company references its website in this news release, information on the website is not to be incorporated herein.

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