Stock Preacher

ON Semiconductor Corp. (NASDAQ: ONNN)

ON Semiconductor Corp. (ONNN) is a global supplier of power, analog, digital signal processing, mixed signal, advanced logic, data management semiconductors, memory and standard component devices. It designs, manufactures and markets semiconductor components that address the design needs of electronic systems and products. The Company operates through five segments: automotive and power regulation, computing, digital and consumer, standard products and custom and foundry product group.

The Company’s power management semiconductor components controls, converts, protects and monitors the supply of power to the different elements within a range of electronic devices. Its Automotive and Power Regulation segment offers amplifiers, comparators, voltage regulators, and references; AC-DC/DC-DC converters; ignition insulated gate bipolar transistors; and high voltage MOS field effect transistors used in power conditioning and switching applications. The Computing Products segment provides controllers and power MOSFETs for power management in VCORE, DDR, and chipsets. Its Digital and Consumer Products segment offers products for digital portable devices in four application areas, such as system power management with FETs and DC-DC converters; EMI and RF filtering; audio and video signal distribution with analog switches and op amps; and LED lighting solutions for LCD screens and camera flash. The Company’s Standard Products segment provides standard diode and transistor products, over-voltage protection products, standard logic products, and high frequency products for consumer electronics, computing, wireless communications, industrial electronics and networking markets. Its Custom And Foundry Product Group segment engages in the design and manufacture of customer-specific and standard semiconductor products for the automotive, medical, industrial, communications, and military, and aerospace markets. These products fall into the logic, analog and discrete categories used by the World Semiconductor Trade Statistics (WSTS) group.

On March 17, 2008, the Company completed the acquisition of AMIS Holdings Inc. On October 10, 2008, the Company acquired Catalyst Semiconductor Inc.

ONNN was founded in 1999 and is headquartered in Phoenix, Arizona.

Source: Reuters.com, SEC Filings.

Financial Summary

ONNN reported total revenues of $472.9 million in the third quarter of 2009, an increase of approximately 13% from the second quarter of 2009. During the third quarter of 2009, the Company reported GAAP net income of $29.9 million, or $0.07 per fully diluted share. In the third quarter of 2009, GAAP net income included net charges of $41.0 million, or $0.09 per fully diluted share, from special items. The special item details can be found in the attached schedules. During the second quarter of 2009, the Company reported a GAAP net loss of $3.0 million, or $0.01 per fully diluted share.

Third quarter 2009 non-GAAP net income was $70.9 million, or $0.16 per share on a fully diluted basis. Second quarter 2009 non-GAAP net income was $38.7 million, or $0.09 per share on a fully diluted basis. A

reconciliation of these non-GAAP financial measures (and other non-GAAP measures used elsewhere in this

release, such as non-GAAP gross margin and adjusted EBITDA) to the Company’s most directly comparable

measures prepared in accordance with U.S. GAAP are set forth in the attached schedules and on the Company’s  Web site at www.onsemi.com.

On a mix-adjusted basis, average selling prices in the third quarter of 2009 were down less than 2%

when compared to the second quarter of 2009. GAAP gross margin in the third quarter was 37.2%.

Non-GAAP gross margin in the third quarter of 2009 was 38.5%. GAAP gross margin in the third

quarter included a net charge of approximately $6.5 million, or approximately 130 basis points, from special

items. The special item details can be found in the attached schedules.

Source: Reuters.com, SEC Filings.

Analyst Consensus

This is the consensus forecast among 22 polled investment analysts. Against the ON Semiconductor Corp. company.

The 18 analysts offering 12-month price targets for ONNN have a median target of 10.00, with a high estimate of 13.00 and a low estimate of 7.50. The median estimate represents a 27.23% increase from the last price of 7.86.

Source: www.ft.com

Source: http://www.reuters.com/finance/stocks/estimates?symbol=ONNN.O

Investment Highlights

ONNN has introduced 24 new 30 volt (V), N-channel Trench MOSFETs in DPAK, SO-8FL, µ8FL, and SOIC-8 packages featuring enhanced switching performance for synchronous buck converters in computing and game console applications.

The new series of MOSFETs utilize ONNN’s Trench technology designed to deliver on-state resistance [RDS(on)] and improved switching performance for synchronous DC-to-DC converters in PC, server, game console, VRM, and point-of-load applications.  DPAK, SO-8FL, and SOIC-8 package solutions – which are a drop-in replacement for NTD48x, NTMFS48x, and NTMS48x series– and the new µ8FL 3.3 mm x 3.3 mm solution achieve industry-leading low RDS(on) in relation to packaging size.

ONNN’s new MOSFETs feature optimized low gate charge and RDS(on) to improve switching performance and overall system efficiency in an advanced packaging portfolio.  All devices are lead-free (Pb-free), Halogen free, and RoHs compliant.

ONNN has expanded its custom foundry capabilities with the launch of a new cost competitive, industry compatible 0.18 micron (µm) CMOS process technology. The ONC18 process is an ideal platform for developing low power and highly integrated digital and mixed-signal application-specific integrated circuit (ASIC) devices for automotive, industrial and medical applications. The ONC18-based solutions will be manufactured at ONNN’s 8-inch wafer fabrication facility in Gresham, Oregon, so the process is also expected to prove attractive for designers of U.S. military applications seeking domestic production with ITAR-compliant partners.

Suitable for ASICs requiring up to 10 M gates, the ONC18 process features between four and six levels of metal and allows designers to integrate 1.8 volts (V) core voltage with 1.8 V and 3.3 V input/output (I/O). Components for mixed signal design include a variety of resistors and nominal [1.0 femtofarad per micron squared (fF/µm2)] and high value (2.0 fF/µm2) stackable metal-insulator-metal (MIM) capacitors. This base process supports an extensive and modular 0.18 micron BCD, and high voltage roadmap.

ONNN’s new process is supported with a design kit offering comprehensive core, I/O and memory libraries. Gate densities and power consumptions for high density core and mixed signal core cells are 124 K gates/mm2 and 46 microwatt per megahertz per gate (µW/MHz/gate) and 120 K gates/mm2 and 28 µW/MHz/gate, respectively. Memory options include 1.1 M bit synchronous single port and 512K bit dual port SRAM and 1.1M bit high-density, low-leakage VIA-programmable ROM.

Future development for the ONC18 platform will enable ONNN to launch enhanced mixed signal capabilities and options for higher voltage handling.

Source: http://www.onsemi.com/PowerSolutions/home.do

Technical Analysis

Simple Moving Average offers no current signals.

ONNN’s recent volatility has been greater than normal. This is evidenced by the increased distance between the upper and lower Bollinger Bands. These bands measure volatility using standard deviation and a large width is due to high volatility. Additionally, ONNN is trading within its Bollinger Bands. This is a normal condition and suggests that the stock is neither overbought nor oversold relative to the recent price action.

The MACD for ONNN currently indicates a strong bullish signal for two reasons. First, the MACD is above the signal line, a 9-day moving average. Second, the MACD is above 0, which implies that the underlying moving averages are trending higher.

Comparative Analysis

Source: Thomson Financial

Insider Trading Activity

Source: Yahoo Finance

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