For the first quarter of 2016, highlights include:

• Total revenues of $817.2 million
• GAAP earnings per diluted share of $0.09, non-GAAP earnings per diluted share of $0.17
• GAAP and non-GAAP gross margin of 33.7 percent
• GAAP operating margin of 7.1 percent, and non-GAAP operating margin of 10.6 percent
• Secured committed financing for acquisition of Fairchild Semiconductor

PHOENIX — (BUSINESS WIRE) — May 8, 2016 — ON Semiconductor Corporation (Nasdaq: ON) today announced that total revenues in the first quarter of 2016 were $817.2 million, down approximately three percent compared to the fourth quarter of 2015. During the first quarter of 2016, the company reported GAAP net income of $36.0 million, or $0.09 per diluted share. The first quarter 2016 GAAP net income was negatively impacted by approximately $34.3 million of special items, details of which can be found in the attached schedules.

First quarter 2016 non-GAAP net income was $70.3 million, or $0.17 per diluted share, compared to $78.9 million, or $0.19 per diluted share, for the fourth quarter of 2015. A reconciliation of these non-GAAP financial measures (and other non-GAAP measures used elsewhere in this release) to the company's most directly comparable measures prepared in accordance with U.S. GAAP are set forth in the attached schedules and on our website at http://www.onsemi.com. Additional information on revenue by end market, region, distribution channel, business units and share count can be found on the "Investors" section of our website.

Total company GAAP and non-GAAP gross margin in the first quarter was 33.7 percent. For the first quarter of 2016, GAAP operating margin was 7.1 percent, and non-GAAP operating margin was 10.6 percent.

Adjusted EBITDA for the first quarter of 2016 was $141.5 million. Adjusted EBITDA for the fourth quarter of 2015 was $147.3 million.

"We delivered strong operating performance in the first quarter with strong gross margin expansion and continued discipline in operating expenses control," said Keith Jackson, president and CEO of ON Semiconductor. "We will continue to optimize our operations to align our cost structure with the prevailing business environment and to deliver strong financial results.

"During the first quarter, we noticed a stabilization in business conditions, although a few end-markets experienced greater than expected softness. With a strong design win pipeline and exposure to faster growing segments within a diverse group of end-markets, we remain well positioned to outgrow the semiconductor industry."

SECOND QUARTER 2016 OUTLOOK

"Based on product booking trends, backlog levels, and estimated turns levels, we anticipate that total ON Semiconductor revenue will be approximately $835 to $875 million in the second quarter of 2016," Jackson said. "Backlog levels for the second quarter of 2016 represent approximately 80 to 85 percent of our anticipated second quarter 2016 revenue. The outlook for the second quarter of 2016 includes stock-based compensation expense of approximately $14 million to $16 million."

The following table outlines ON Semiconductor's projected second quarter of 2016 GAAP and non-GAAP outlook.

ON SEMICONDUCTOR Q2 2016 BUSINESS OUTLOOK
		Total ON Semiconductor GAAP		Special Items ***		Total ON Semiconductor Non-GAAP****
Revenue		$835 to $875 million				$835 to $875 million
Gross Margin		33.3% to 35.3%				33.3% to 35.3%
Operating Expenses		$215 to $227 million		$25 to $27 million		$190 to $200 million
Net Interest Expense / Other Expenses*		$38 to $41 million		$31 million		$7 to $10 million
Tax		$3 to $7 million		($2) million		$5 to $9 million
Diluted Share Count **		416 million				416 million

* Convertible Notes, Non-cash Interest Expense is calculated pursuant to FASB's Accounting Standards Codification (“ASC”) Topic 470: Debt. Includes interest expense related to acquisition of Fairchild Semiconductor.

** Diluted share count can vary for, among other things, the actual exercise of options or vesting of restricted stock units, the incremental dilutive shares from the company's convertible senior subordinated notes, and the repurchase or the issuance of stock or convertible notes or the sale of treasury shares. In periods when the quarterly average stock price per share exceeds $18.50, the Non-GAAP diluted share count and Non-GAAP net income per share includes the anti-dilutive impact of the company’s hedge transactions, issued concurrently with the 1.00% Notes. At an average stock price per share between $18.50 and $25.96, the hedging activity offsets the potentially dilutive effect of the 1.00% Notes and warrants.

*** Special items may include: amortization of intangible assets; amortization of acquisition-related intangibles; expensing of appraised inventory fair market value step-up; inventory valuation adjustments; purchased in-process research and development expenses; restructuring, asset impairments and other, net; goodwill impairment charges; gains and losses on debt prepayment; non-cash interest expense; interest incurred for acquisition related financing for periods prior to the acquisition close; income tax adjustments to approximate cash taxes; actuarial (gains) losses on pension plans and other pension benefits; and certain other special items, as necessary.

**** Regulation G and other provisions of the securities laws regulate the use of financial measures that are not prepared in accordance with GAAP. We believe these non-GAAP measures provide important supplemental information to investors. We use these measures, together with GAAP measures, for internal managerial purposes and as a means to evaluate period-to-period comparisons. However, we do not, and you should not, rely on non-GAAP financial measures alone as measures of our performance. We believe that non-GAAP financial measures reflect an additional way of viewing aspects of our operations that - when taken together with GAAP results and the reconciliations to corresponding GAAP financial measures that we also provide in our releases - provide a more complete understanding of factors and trends affecting our business. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures, even if they have similar names.

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