You should read the following discussion in conjunction with our audited
historical consolidated financial statements, which are included in the 2020
Form 10-K and our unaudited consolidated financial statements for the fiscal
quarter ended April 2, 2021 included elsewhere in this Form 10-Q. This
Management's Discussion and Analysis of Financial Condition and Results of
Operations contains statements that are forward-looking. These statements are
based on current expectations and assumptions that are subject to risks,
uncertainties and other factors. Actual results could differ materially because
of the factors discussed below or elsewhere in this Form 10-Q. See Part II, Item
1A. "Risk Factors" of this Form 10-Q and Part I, Item 1A. "Risk Factors" of the
2020 Form 10-K.

Executive Overview

ON Semiconductor Overview

ON Semiconductor is driving innovation in energy-efficient electronics. We
believe that our extensive portfolio of sensors, power management, connectivity,
custom and SoC, analog, logic, timing and discrete devices helps customers
efficiently solve their design challenges in advanced electronic systems and
products. Our power management and motor driver semiconductor components
control, convert, protect and monitor the supply of power to the different
elements within a wide variety of electronic devices. Our ASICs and SoC devices
use analog, MCU, DSP, mixed-signal and advanced logic capabilities to enable the
application and uses of many of our automotive, consumer and industrial
customers' products. Our signal management semiconductor components provide
high-performance clock management and data flow management for precision
computing, communications and industrial systems. Our portfolio of sensors,
including image sensors, radar and LiDAR, provides advanced solutions for
automotive, industrial and IoT applications. Our high performance Wi-Fi solution
creates a strong platform for addressing connectivity solutions for industrial
IoT applications. Our standard semiconductor components serve as "building
blocks" within virtually all types of electronic devices.

We serve a broad base of end-user markets, including automotive, communications,
computing, consumer, and industrial. Our portfolio of devices, which are found
in a wide variety of end-products enables us to offer advanced ICs and the
"building block" components that deliver system-level functionality and design
solutions. We offer micro packages, which provide increased performance
characteristics while reducing the critical board space inside today's
ever-shrinking electronic devices and power modules, delivering improved energy
efficiency and reliability for a wide variety of medium and high power
applications.

We shipped approximately 17.5 billion units during the quarter ended April 2,
2021, as compared to 15.4 billion units during the quarter ended April 3, 2020,
resulting in a period-over-period increase of approximately 14%. As of April 2,
2021, we were organized into the following three operating and reportable
segments: PSG, ASG and ISG.

Business Strategy Developments

Our primary focus continues to be on gross margin expansion, while at the same
time achieving significant revenue growth in our focused end-markets of
automotive, industrial and communications infrastructure as well as being
opportunistic in other end-markets. We began the process of evaluating our
current product portfolio during the first quarter of 2021 and continue to make
progress in such efforts. We have allocated capital, research and development
investments and resources to accelerate growth in high-margin products and
end-markets by moving away from non-differentiated products, which have had
historically lower gross margins.

We believe these actions, among others, will also allow us to transition to a
lighter internal fabrication model where our gross margins will be less volatile
and not as heavily influenced by our internal manufacturing volumes. We are also
rationalizing our manufacturing footprint to align with our investment
priorities and corporate strategy. Our goal is to reduce volatility in our gross
margins and maximize return on our manufacturing investments with the intention
of having our product strategy drive our manufacturing footprint and capital
investments.

On March 4, 2021, as part of our ongoing efforts to realign investments to focus
on growth drivers and key markets and to streamline our operations, we announced
our plans to implement the ISP during the first half of 2021. The Company
expects that the ISP will impact approximately 740 employees, resulting in
estimated severance charges and other benefits between $58.0 million and $62.0
million during this period. During the first quarter of 2021, we notified more
than half of the impacted employees and incurred severance charges under the ISP
of $33.0 million. We expect to notify the remaining employees and incur the
corresponding severance charges during the second quarter of 2021.

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Table of Contents Impact of the Novel Coronavirus Disease 2019 ("COVID-19") Pandemic on our Business

The ongoing COVID-19 pandemic has resulted in a significant volatility in global
economic activity. As a result, we have experienced volatility in the
end-markets in which we do business due to fluctuations in consumer and business
spending, which, in-turn, had an impact on the demand for some of our products.
The severity and duration of these economic repercussions due to the COVID-19
pandemic, including any resulting impact on our business, remain largely unknown
and will depend on many factors. In response to business and industry trends, we
have proactively implemented preventative protocols, which we continuously
assess and update for current local conditions and emerging trends. These steps
are intended to safeguard our employees, contractors, customers, suppliers and
communities, and to ensure business continuity in case of further government
restrictions or if severe outbreaks impact operations at certain of our
facilities.

While all of our global manufacturing sites are currently operational, our
facilities could be required to temporarily curtail production levels or
temporarily cease operations based on government mandates in response to further
outbreaks. The ultimate extent to which the COVID-19 pandemic will impact demand
for our products depends on future developments, which are highly uncertain and
difficult to predict, including the effectiveness and utilization of vaccines
for COVID-19 and its variants, new information that may emerge concerning the
severity and longevity of the COVID-19 pandemic and efforts undertaken by
various governments to contain the spread of COVID-19 and its variants.






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Results of Operations

Quarter Ended April 2, 2021 compared to the Quarter Ended April 3, 2020

The following table summarizes certain information relating to our operating results that has been derived from our unaudited consolidated financial statements (in millions):

                                                                                  Quarters Ended
                                                                       April 2, 2021           April 3, 2020           Dollar Change
Revenue                                                              $     

1,481.7 $ 1,277.9 $ 203.8 Cost of revenue (exclusive of amortization shown below)

  960.5                   875.2                    85.3
Gross profit                                                                  521.2                   402.7                   118.5
Operating expenses:
Research and development                                                      173.6                   171.0                     2.6
Selling and marketing                                                          78.9                    76.8                     2.1
General and administrative                                                     72.4                    71.2                     1.2

Amortization of acquisition-related intangible assets                          25.0                    32.3                    (7.3)
Restructuring, asset impairments and other charges, net                        42.5                    32.8                     9.7
Intangible asset impairment                                                     2.9                       -                     2.9
Total operating expenses                                                      395.3                   384.1                    11.2
Operating income                                                              125.9                    18.6                   107.3
Other income (expense), net:
Interest expense                                                              (33.4)                  (42.5)                    9.1
Interest income                                                                 0.4                     1.9                    (1.5)

Other income                                                                    4.5                     0.1                     4.4
Other income (expense), net                                                   (28.5)                  (40.5)                   12.0
Income (loss) before income taxes                                              97.4                   (21.9)                  119.3
Income tax (provision) benefit                                                 (7.1)                    8.2                   (15.3)
Net income (loss)                                                              90.3                   (13.7)                  104.0
Less: Net income attributable to non-controlling interest                      (0.4)                   (0.3)                   (0.1)

Net income (loss) attributable to ON Semiconductor Corporation $

   89.9          $        (14.0)         $        103.9



Revenue

Revenue was $1,481.7 million and $1,277.9 million for the quarters ended
April 2, 2021 and April 3, 2020, respectively, representing an increase of
$203.8 million, or approximately 16%. We had one customer, a distributor, whose
revenue accounted for approximately 10.6% of the total revenue for the quarter
ended April 2, 2021.

Revenue by operating and reportable segments was as follows (dollars in
millions):
                                        Quarter Ended              As a % of              Quarter Ended              As a % of
                                        April 2, 2021          Total Revenue (1)          April 3, 2020          Total Revenue (1)
PSG                                    $      747.0                        50.4  %       $      623.9                        48.8  %
ASG                                           531.5                        35.9  %              467.1                        36.6  %
ISG                                           203.2                        13.7  %              186.9                        14.6  %
Total revenue                          $    1,481.7                                      $    1,277.9

(1) Certain amounts may not total due to rounding of individual amounts.

Revenue from PSG increased by $123.1 million, or approximately 20%, for the quarter ended April 2, 2021 compared to the quarter ended April 3, 2020. The revenue from our Advanced Power Division and our Protection, Signal and Integrated Circuits Division increased by $71.2 million and $51.9 million, respectively, due to improving economic conditions resulting in

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significantly increased demand for our products compared to the quarter ended
April 3, 2020. During the first quarter of 2020, we experienced delays in
fulfilling certain customer orders due to supply chain constraints and certain
of our factories operating at significantly reduced capacity levels as a result
of the COVID-19 pandemic, neither of which were experienced during the first
quarter of 2021.

Revenue from ASG increased by $64.4 million, or approximately 14%, for the
quarter ended April 2, 2021 compared to the quarter ended April 3, 2020. The
revenue from our Mobile, Computing and Cloud Division, Industrial and Offline
Power Division and Automotive Division increased by $37.3 million, $22.4 million
and $19.7 million, respectively, which was partially offset by a decrease of
$15.0 million in our Wireless Connectivity Solutions Division. The increases
were primarily due to increased demand for our products in various end-markets
due to improving economic conditions. Additionally, as discussed above, during
the first quarter of 2020, we experienced delays in fulfilling certain customer
orders due to supply chain constraints and certain of our factories operating at
significantly reduced capacity levels as a result of the COVID-19 pandemic, none
of which were experienced during the first quarter of 2021.

Revenue from ISG increased by $16.3 million, or approximately 9%, for the
quarter ended April 2, 2021 compared to the quarter ended April 3, 2020. The
revenue from our Automotive Sensing Division increased by $14.0 million due to
the significant improvement of economic conditions, specifically with automotive
component manufacturers and the automotive industry overall, resulting in
increased demand for these products.

Revenue by geographic location, based on sales billed from the respective country or regions, was as follows (dollars in millions):

                                       Quarter Ended              As a % of              Quarter Ended               As a % of
                                       April 2, 2021         Total Revenue (1)           April 3, 2020           Total Revenue (1)
Singapore                             $      509.0                        34.4  %       $       408.3                        32.0  %
Hong Kong                                    342.2                        23.1  %               316.2                        24.7  %
United Kingdom                               268.9                        18.1  %               227.0                        17.8  %
United States                                184.3                        12.4  %               184.5                        14.4  %
Other                                        177.3                        12.0  %               141.9                        11.1  %
Total                                 $    1,481.7                                      $     1,277.9

(1) Certain amounts may not total due to rounding of individual amounts.

Gross Profit and Gross Margin (exclusive of amortization of acquisition-related intangible assets)

Our gross profit by operating and reportable segments was as follows (dollars in
millions):
                                          Quarter Ended                    As a % of                    Quarter Ended                    As a % of
                                          April 2, 2021               Segment Revenue (1)             April 3, 2020 (2)             Segment Revenue (1)
PSG                                      $       246.5                                  33.0  %       $        182.6                                  29.3  %
ASG                                              206.8                                  38.9  %                157.8                                  33.8  %
ISG                                               67.9                                  33.4  %                 62.3                                  33.3  %
Total gross profit                       $       521.2                                                $        402.7



(1)Certain amounts may not total due to rounding of individual amounts.
(2)Beginning in the first quarter of 2021, unallocated manufacturing costs were
included as part of segment operating results to determine segment gross profit.
As a result, the prior-period amounts have been reclassified to conform to
current-period presentation.

Our gross profit increased by $118.5 million, or approximately 29%, from $402.7
million for the quarter ended April 3, 2020 to $521.2 million for the quarter
ended April 2, 2021. Our overall gross margin increased to 35.2% for the quarter
ended April 2, 2021 from 31.5% for the quarter ended April 3, 2020.

The favorable economic environment and significant improvement in demand from
automotive component manufacturers and the automotive industry overall
contributed to increased demand for our products. The increase in gross profit
and gross margin was due to an increase in sales volume, increased utilization
and a better mix in the portfolio of products sold. Also, during the quarter
ended April 3, 2020, we recorded approximately $20 million of fixed overhead
charges to cost of revenues, representing
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under-absorbed inventory costs, primarily due to the COVID-19 pandemic, which
adversely impacted our gross margin for that period.

Operating Expenses

Research and development expenses were $173.6 million for the quarter ended
April 2, 2021, as compared to $171.0 million for the quarter ended April 3,
2020, representing an increase of $2.6 million, or approximately 2%. The
decrease in payroll expenses resulting from restructuring actions undertaken
during 2020 was offset by an increase in variable compensation recorded during
the quarter ended April 2, 2021.

Selling and marketing expenses were $78.9 million for the quarter ended April 2,
2021, as compared to $76.8 million for the quarter ended April 3, 2020,
representing an increase of $2.1 million, or approximately 3%. The decrease in
travel-related expenses due to travel restrictions caused by the COVID-19
pandemic was offset by an increase in variable compensation recorded during the
quarter ended April 2, 2021.

General and administrative expenses were $72.4 million for the quarter ended
April 2, 2021, as compared to $71.2 million for the quarter ended April 3, 2020,
representing an increase of $1.2 million, or approximately 2%. The decrease in
the use of external consultants and travel-related expenses was offset by an
increase in variable compensation recorded during the quarter ended April 2,
2021.

Other Operating Expenses

Amortization of Acquisition-Related Intangible Assets

Amortization of acquisition-related intangible assets was $25.0 million for the
quarter ended April 2, 2021, as compared to $32.3 million for the quarter ended
April 3, 2020, representing a decrease of $7.3 million, or approximately 23%.
The decrease in expense was primarily due to full amortization of certain of our
technology-related assets from our previous acquisitions during 2020.

Restructuring, Asset Impairments and Other, Net

Restructuring, asset impairments and other, net was $42.5 million for the
quarter ended April 2, 2021, as compared to $32.8 million for the quarter ended
April 3, 2020. The increase was primarily due to certain exit charges and costs
relating to the ISP announced during the first quarter of 2021. The expense
during the first quarter of 2020 related primarily to the voluntary separation
program announced during that quarter. For additional information, see Note 4:
''Restructuring, Asset Impairments and Other, Net'' in the notes to our
unaudited consolidated financial statements included elsewhere in this Form
10-Q.

Interest Expense

Interest expense decreased by $9.1 million to $33.4 million during the quarter
ended April 2, 2021, as compared to $42.5 million during the quarter ended
April 3, 2020. The decrease was primarily due to the decrease in the one month
LIBO Rate. Our average gross long-term debt balance (including current
maturities) for the quarter ended April 2, 2021 was $3,512.5 million at a
weighted-average interest rate of 3.8%, as compared to $4,303.3 million at a
weighted-average interest rate of 3.9% for the quarter ended April 3, 2020.

Other Income (Expense)

Other income (expense) increased by $4.4 million to income of $4.5 million for
the quarter ended April 2, 2021, compared to income of $0.1 million for the
quarter ended April 3, 2020. The increase was primarily due to the fluctuations
in foreign currencies resulting in increased transaction gains offset by losses
on hedges that were realized.

Income Tax Provision and Benefit

We recorded an income tax provision of $7.1 million and an income tax benefit of $8.2 million during the quarters ended April 2, 2021 and April 3, 2020, respectively.

The income tax provision for the quarter ended April 2, 2021 consisted primarily
of a provision of $17.8 million for income and withholding taxes of certain of
our foreign and domestic operations, partially offset by discrete benefits of
$4.0 million relating to uncertain tax positions, $4.2 million relating to net
equity award windfalls and $2.5 million of other discrete benefits.
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The income tax benefit for the quarter ended April 3, 2020 consisted primarily
of a benefit of $8.4 million for income and withholding taxes of certain of our
foreign and domestic operations, partially offset by $0.2 million of discrete
expenses.

For additional information, see Note 12: ''Income Taxes'' in the notes to the unaudited consolidated financial statements included elsewhere in this Form 10-Q.

Liquidity and Capital Resources

This section includes a discussion and analysis of our cash requirements, off-balance sheet arrangements, contingencies, sources and uses of cash, operations, working capital and long-term assets and liabilities.

Contractual Obligations

As of April 2, 2021, there were no material changes outside the ordinary course
of business to our contractual obligations table, including the notes thereto,
contained in the 2020 Form 10-K.

Off-Balance Sheet Arrangements

In the ordinary course of business, we provide standby letters of credit or
other guarantee instruments to certain parties in connection with certain
transactions, including, but not limited to: material purchase commitments,
agreements to mitigate collection risk, leases, utilities or customs guarantees.
As of April 2, 2021, our Revolving Credit Facility included $15.0 million of
commitment for the issuance of letters of credit subject to the available
balance of the Revolving Credit Facility. There were $0.9 million letters of
credit outstanding under our Revolving Credit Facility as of April 2, 2021,
which reduced our borrowing capacity dollar-for-dollar. As of April 2, 2021, we
also had outstanding guarantees and letters of credit outside of our Revolving
Credit Facility in the amount of $8.6 million.

As part of securing financing in the ordinary course of business, we have issued
guarantees related to certain of our subsidiaries, which totaled $0.9 million as
of April 2, 2021. Based on historical experience and information currently
available, we believe that we will not be required to make payments under the
standby letters of credit or guarantee arrangements for the foreseeable future.

We have not recorded any liability in connection with these letters of credit
and guarantee arrangements. See Note 6: ''Long-Term Debt'' and Note 9:
''Commitments and Contingencies'' in the notes to our unaudited consolidated
financial statements found elsewhere in this Form 10-Q for additional
information.

Contingencies

We are a party to a variety of agreements entered into in the ordinary course of
business pursuant to which we may be obligated to indemnify other parties for
certain liabilities that arise out of or relate to the subject matter of the
agreements. Some of the agreements entered into by us require us to indemnify
the other parties against losses due to IP infringement, environmental
contamination and other property damage, personal injury, our failure to comply
with applicable laws, our negligence or willful misconduct or our breach of
representations, warranties or covenants related to such matters as title to
sold assets.
We face risk of exposure to warranty and product liability claims in the event
that our products fail to perform as expected or such failure of our products
results, or is alleged to result, in economic damage, bodily injury or property
damage. In addition, if any of our designed products are alleged to be
defective, we may be required to participate in their recall. Depending on the
significance of any particular customer and other relevant factors, we may agree
to provide more favorable rights to such customer for valid defective product
claims.

We maintain directors' and officers' insurance policies that indemnify our directors and officers against various liabilities, including certain liabilities under the Exchange Act, that might be incurred by any director or officer in his or her capacity as such.

The agreement and plan of merger relating to the acquisition of Fairchild
Semiconductor International Inc. (the "Fairchild Agreement") provides for
indemnification and insurance rights in favor of Fairchild's then-current and
former directors, officers and employees. Specifically, we have agreed that, for
no fewer than six years following the Fairchild acquisition, we will:
(a) indemnify and hold harmless each such indemnitee against losses and expenses
(including advancement of attorneys' fees and expenses) in connection with any
proceeding asserted against the indemnified party in connection with such
person's
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serving as a director, officer, employee or other fiduciary of Fairchild or its
subsidiaries prior to the effective time of the acquisition; (b) maintain in
effect all provisions of the certificate of incorporation or bylaws of Fairchild
or any of its subsidiaries or any other agreements of Fairchild or any of its
subsidiaries with any indemnified party regarding elimination of liability,
indemnification of officers, directors and employees and advancement of expenses
in existence on the date of the Fairchild Agreement for acts or omissions
occurring prior to the effective time of the acquisition; and (c) subject to
certain qualifications, provide to Fairchild's then-current directors and
officers an insurance and indemnification policy that provides coverage for
events occurring prior to the effective time of the acquisition that is no less
favorable than Fairchild's then-existing policy, or, if insurance coverage that
is no less favorable is unavailable, the best available coverage.

Similarly, the agreement and plan of merger relating to the acquisition of
Quantenna (the "Quantenna Agreement") provides for indemnification and insurance
rights in favor of Quantenna's then-current and former directors, officers,
employees and agents. Specifically, the Company has agreed that, for no fewer
than six years following the Quantenna acquisition, the Company will:
(a) indemnify and hold harmless each such indemnified party to the fullest
extent permitted by Delaware law in the event of any threatened or actual claim,
suit, action, proceeding or investigation against the indemnified party based in
whole or in part on, or pertaining to, such person's serving as a director,
officer, employee or agent of Quantenna or its subsidiaries or predecessors
prior to the effective time of the acquisition or in connection with the
Quantenna Agreement; (b) maintain in effect provisions of the certificate of
incorporation and bylaws of Quantenna and each of its subsidiaries regarding the
elimination of liability of directors and indemnification of officers, directors
and employees that are no less advantageous to the intended beneficiaries than
the corresponding provisions in the certificate of incorporation and bylaws of
Quantenna and each of its subsidiaries in existence on the date of the Quantenna
Agreement; and (c) obtain and fully pay the premium for a non-cancelable
extension of directors' and officers' liability coverage of Quantenna's
directors' and officers' policies and Quantenna's fiduciary liability insurance
policies in effect as of the date of the Quantenna Agreement.

While our future obligations under certain agreements may contain limitations on
liability for indemnification, other agreements do not contain such limitations,
and under such agreements, it is not possible to predict the maximum potential
amount of future payments due to the conditional nature of our obligations and
the unique facts and circumstances involved in each particular agreement.
Historically, payments made by us under any of these indemnities have not had a
material effect on our business, financial condition, results of operations or
cash flows, and we do not believe that any amounts that we may be required to
pay under these indemnities in the future will be material to our business,
financial condition, results of operations or cash flows.

See Note 9: ''Commitments and Contingencies'' in the notes to our unaudited
consolidated financial statements under the heading "Legal Matters" included
elsewhere in this Form 10-Q for possible contingencies related to legal matters.
See also Part I, Item 1 "Business - Government Regulation" of the 2020 Form 10-K
for information on certain environmental matters.

Sources and Uses of Cash

Our balance of cash and cash equivalents was $1,042.5 million as of April 2,
2021. We require cash to: (i) fund our operating expenses, working capital
requirements, outlays for strategic acquisitions and investments; (ii) service
our debt, including principal and interest; (iii) conduct research and
development; (iv) make capital expenditures; and (v) repurchase our common
stock.

Our principal sources of liquidity are cash on hand, cash generated from
operations, funds from external borrowings and equity issuances. In the near
term, we expect to fund our primary cash requirements through cash generated
from operations and with cash and cash equivalents on hand. We also have the
ability to utilize our Revolving Credit Facility, which has $1,419.0 million
available for future borrowings.

We believe that the key factors that could affect our internal and external sources of cash include:

•Geopolitical and macroeconomic factors caused by the COVID-19 pandemic, which
has had, and is expected to continue to have, negative impacts on the economies
of the majority of countries and industries. The ultimate effect of the COVID-19
pandemic and the responses of various governmental entities and industries
thereto, the duration and severity and the possibility of the re-emergence of
the pandemic in future months and the anticipated recovery period are uncertain.
•Factors that affect our results of operations and cash flows include the impact
on our business and operations as a result of changes in demand for our
products, including as a result of the COVID-19 pandemic, competitive pricing
pressures, effective management of our manufacturing capacity, our ability to
achieve further reductions in operating expenses, the impact of our
restructuring programs on our production and cost
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efficiency and our ability to make the research and development expenditures
required to remain competitive in our business.
•Factors that affect our access to bank financing and the debt and equity
capital markets that could impair our ability to obtain needed financing on
acceptable terms or to respond to business opportunities and developments as
they arise, include interest rate fluctuations, macroeconomic conditions,
including as a result of the COVID-19 pandemic, sudden reductions in the general
availability of lending from banks or the related increase in cost to obtain
bank financing and our ability to maintain compliance with covenants under our
debt agreements in effect from time to time.

Our ability to service our long-term debt, including the 3.875% Notes, 1.625%
Notes, the Revolving Credit Facility and the Term Loan "B" Facility, to remain
in compliance with the various covenants contained in our debt agreements and to
fund working capital, capital expenditures and business development efforts will
depend on our ability to generate cash from operating activities, which is
subject to, among other things, our future operating performance, timing of the
full economic recovery from the COVID-19 pandemic as well as financial,
competitive, legislative, regulatory and other conditions, some or all of which
may be beyond our control.

If we fail to generate sufficient cash from operations, we may need to raise
additional equity or borrow additional funds to achieve our longer-term
objectives. There can be no assurance that such equity or borrowings will be
available when we access the capital markets or, if available, will be at rates
or prices acceptable to us.

During the ordinary course of business, we evaluate our cash requirements and,
if necessary, adjust our expenditures for inventory, operating expenditures and
capital expenditures to reflect the current market conditions and our projected
sales and demand. Our capital expenditures are primarily directed towards
manufacturing equipment. Our capital expenditure levels can materially influence
our available cash for other initiatives. For example, during the quarter ended
April 2, 2021, we paid $77.0 million for capital expenditures, while during the
quarter ended April 3, 2020, we paid $132.3 million for capital expenditures.
Our current minimum contractual capital expenditure commitment for the remainder
of 2021 and 2022 and thereafter is approximately $57.3 million and $4.2 million,
respectively. We expect to incur capital expenditures of approximately 7% to 8%
of annual revenue for the remainder of 2021. Future capital expenditures may be
impacted by events and transactions that are not currently forecasted.

Primary Cash Flow Sources

Our long-term cash generation is dependent on the ability of our operations to
generate cash. Our cash flows from operating activities were $218.5 million and
$166.0 million for the quarters ended April 2, 2021 and April 3, 2020,
respectively. The increase of $52.5 million was primarily attributable to a
significant increase in net income due to increased demand for our products
during the first quarter of 2021, partially offset by further investments in
working capital to meet future demand. Our ability to maintain positive
operating cash flows is dependent on, among other factors, our success in
achieving our revenue goals and manufacturing and operating cost targets.
Management of our assets and liabilities, including both working capital and
long-term assets and liabilities, also influences our operating cash flows, and
each of these components is discussed below.

Working Capital

Working capital, calculated as total current assets less total current
liabilities, fluctuates depending on end-market demand and our effective
management of certain items such as receivables, inventory and payables. Our
working capital, excluding cash and cash equivalents and the current portion of
long-term debt, was $951.8 million as of April 2, 2021 and has fluctuated
between $1,057.1 million and $879.3 million at the end of each of our last eight
fiscal quarters. Our working capital, including cash and cash equivalents and
the current portion of long-term debt, was $1,457.6 million as of April 2, 2021
and has fluctuated between $2,379.8 million and $1,071.4 million at the end of
each of our last eight fiscal quarters. The significant fluctuation was due to
the withdrawal and repayment on our Revolving Credit Facility during 2020 as
well as the reclassification of the 1.625% Notes as a current liability. During
the quarter ended April 2, 2021, our working capital was positively impacted by
reduced capital expenditures. We expect to pay a significant portion of the
severance obligations incurred in connection with the ISP during the second
quarter of 2021.

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Long-Term Assets and Liabilities

Our long-term assets consist primarily of property, plant and equipment,
intangible assets, deferred taxes and goodwill. Our manufacturing
rationalization plans have included efforts to utilize our existing
manufacturing assets and supply arrangements more efficiently. We have taken
certain measures to add manufacturing capacity in connection with the expected
completion of the acquisition of the East Fishkill, New York fabrication
facilities and certain related assets and liabilities on or around December 31,
2022.

Our long-term liabilities, excluding long-term debt and deferred taxes, consist
of liabilities under our foreign defined benefit pension plans, operating lease
liabilities, and contingent tax reserves. With regard to our foreign defined
benefit pension plans, our annual funding of these obligations is equal to the
minimum amount legally required in each jurisdiction in which the plans operate.
This annual amount is dependent upon numerous actuarial assumptions. For
additional information, see Note 5: ''Balance Sheet Information and Other'' and
Note 12: ''Income Taxes'' in the notes to our unaudited consolidated financial
statements included elsewhere in this Form 10-Q.

Key Financing and Capital Events

Overview

For the past several years, we have undertaken various measures to secure
liquidity to pursue acquisitions, repurchase shares of our common stock, reduce
interest costs, amend existing key financing arrangements and, in some cases,
extend a portion of our debt maturities to continue to provide us additional
operating flexibility.

Cash Management

Our ability to manage cash is limited, as our primary cash inflows and outflows
are dictated by the terms of our sales and supply agreements, contractual
obligations, debt instruments and legal and regulatory requirements. While we
have some flexibility with respect to the timing of capital equipment purchases,
we must invest in capital equipment on a timely basis to allow us to maintain
our manufacturing efficiency and support our platforms for new products.

Debt Guarantees and Related Covenants

As of April 2, 2021, we were in compliance with the indentures relating to our
3.875% Notes and 1.625% Notes and with covenants relating to our Term Loan "B"
Facility and Revolving Credit Facility. The 3.875% Notes and 1.625% Notes are
senior to the existing and future subordinated indebtedness of ON Semiconductor
and its guarantor subsidiaries, rank equally in right of payment to all of our
existing and future senior debt and, as unsecured obligations, are subordinated
to all of our existing and future secured debt to the extent of the assets
securing such debt.

Recent Accounting Pronouncements

For a discussion of recent accounting pronouncements, see our 2020 Form 10-K and Note 3: "Recent Accounting Pronouncements" in the notes to our unaudited consolidated financial statements included elsewhere in this Form 10-Q.

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