Share

Record Quarterly Net Income and Earnings per Share

PHOENIX, Ariz. – Oct. 26, 2006 – ON Semiconductor Corporation (Nasdaq: ONNN) today announced that total revenues in the third quarter of 2006 were $420.9 million, an increase of approximately 12 percent from the second quarter of 2006. Total revenues during the quarter included approximately $372.2 million of product revenues and approximately $48.7 million of manufacturing services revenue. During the third quarter of 2006, the company reported net income of $76.8 million, or $0.23 per share on a fully diluted basis. Third quarter 2006 results include approximately $2.9 million associated with stock based compensation expense primarily due to our adoption of FAS 123(R) Share Based Payment. During the second quarter of 2006, the company reported net income of $67.5 million, or $0.19 per share on a fully diluted basis, which included approximately $3.3 million of restructuring, asset impairments and other charges. Second quarter 2006 results included approximately $2.4 million associated with stock based compensation expense.

On a mix-adjusted basis, average selling prices in the third quarter of 2006 were approximately flat with the second quarter of 2006. The company’s gross margin in the third quarter was 38.1 percent, as anticipated, a decrease of approximately 270 basis points as compared to the second quarter of 2006 primarily due to an increase in lower margin manufacturing services revenue. Gross margins for product revenue were approximately 40.0 percent during the third quarter of 2006 compared to 41.6 percent during the second quarter of 2006.

EBITDA for the third quarter of 2006 was $106.3 million. EBITDA for the second quarter of 2006 was $96.8 million, which included approximately $3.3 million of restructuring, asset impairments and other charges. A reconciliation of this non-GAAP financial measure to the company’s net income and net cash provided by operating activities prepared in accordance with U.S. GAAP is set forth in the attached schedule.

“ON Semiconductor had another quarter of strong revenue growth driven by our portfolio of analog and power products targeted towards the Computing, Consumer and Wireless end-markets as well as an increase in our manufacturing services revenue” said Keith Jackson, ON Semiconductor president and CEO. “The company grew net income for the seventh consecutive quarter to a record level of $76.8 million in the third quarter of 2006 and continues to deliver strong gross margin and cash flow from operations. During the third quarter, we used cash on hand to prepay approximately $60 million of our senior secured credit facility reducing our debt levels to a record low. We intend to continue paying down our debt with free cash flow from operations, consistent with our long-term financial strategy.”

FOURTH QUARTER 2006 OUTLOOK
“Based upon product booking trends, backlog levels, anticipated manufacturing services revenue and estimated turns levels, we anticipate that total revenues will be approximately $390 to $400 million in the fourth quarter of 2006,” Jackson said. “We also anticipate that approximately $30 to $35 million of our total revenues will come from manufacturing services revenue. Backlog levels at the beginning of the fourth quarter were down from backlog levels at the beginning of the third quarter of 2006, and represented over 90 percent of our anticipated fourth quarter 2006 revenues. We expect that average selling prices for the fourth quarter of 2006 will be down approximately one percent sequentially. We expect our product gross margin to range from 38 to 39 percent and expect our manufacturing services gross margin to be approximately break-even in the fourth quarter of 2006. We currently expect our stock based compensation in accordance with FAS No. 123 (R) to be approximately $3 million in the fourth quarter of 2006.”

TELECONFERENCE
ON Semiconductor will hold a conference call for the financial community at 5:00 p.m. Eastern time (ET) today to discuss the third quarter 2006 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 approximately 30 days following the conference call.

About ON Semiconductor
With its global logistics network and strong portfolio of power semiconductor devices, ON Semiconductor (Nasdaq: ONNN) is a preferred supplier of power solutions to engineers, purchasing professionals, distributors and contract manufacturers in the computer, cell phone, portable devices, automotive and industrial markets. For more information, please 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, 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 the fourth quarter of 2006 and its bookings trends, backlog levels, estimated turns levels, revenues, gross margins and average selling prices, stock based compensation expense 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, risks and costs associated with increased and new regulation of corporate governance and disclosure standards (including pursuant to Section 404 of the Sarbanes-Oxley Act of 2002), and risks involving environmental or other governmental regulation. Additional factors that could affect the company's future operating results are in Item 1A Risk Factors of our Form 10-K for the year ended December 31, 2005 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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