Update on impact to ON Semiconductor from Japan earthquake

PHOENIX, USA: ON Semiconductor Corp. announced the impact to operations in Japan from last Friday’s 9.0 magnitude earthquake. The company has confirmed that there have been no on-site injuries to the SANYO Semiconductor division or other ON Semiconductor employees in Japan as a result of the earthquake and tsunami.

“Our deepest condolences go out to the people of Japan following the tragic earthquake that struck on March 11,” said Keith Jackson, ON Semiconductor president and CEO. “Our first priority is, as always, the personal safety and well being of those impacted by the event. We continue to assess our production facilities, the supply chain infrastructure and the customer impact from the earthquake and tsunami. We began posting impact information about our Japan operations last week on the company’s website at www.onsemi.com and will continue to post updates and communicate with our various stakeholders as new information becomes available.”

ON Semiconductor currently owns and operates a total of three production facilities in Japan, located in Aizu, Niigata and Hanyu. Additionally, the company operates another three production facilities leased from SANYO Electric Co. Ltd located in Gunma, Gifu and Kasukawa. Initial reports indicate all six sites have sustained only minimal physical damage and remain structurally sound as a result of the earthquake and tsunami. Production has been restored at Niigata, Gifu, Kasukawa and Hanyu and was initially restored at Aizu.

However, infrastructure services such as fuel, electricity, gases, water, chemicals and logistics to ON Semiconductor’s factories and those of its customers and suppliers in Japan have nevertheless been impacted by the consequences of the earthquake and tsunami. Based on currently available information, this infrastructure disruption is now expected to result in a temporary shutdown of operations at the company’s Aizu and Gunma facilities until services can be reliably restored.

The potential for intermittent supply of these services may cause temporary production disruptions at other locations as well. The company currently anticipates infrastructure services will improve towards the end of the first quarter. The company is identifying options to shift production to other facilities to support supply continuity for customers.

As a result of the earthquake and tsunami, ON Semiconductor could potentially see a negative impact to revenues in the first quarter of 2011 due to disruption of infrastructure services, logistics issues and the ability of customers to receive product deliveries within Japan.

The potential negative impact to revenues in the first quarter could be in the range of two to four percent of revenues based on the mid-point of total combined revenue guidance for ON Semiconductor and SANYO Semiconductor of $852.5 million provided on Feb. 3, 2011. We cannot currently predict the impact of the earthquake and tsunami on other guidance provided in our Feb. 3, 2011 earnings release at this time. We disclaim any obligation to update this guidance in the future. The company is working with its insurance carriers to assess and recover incurred losses from business interruption, supply chain disruption and property damage, as applicable.

ON Semiconductor expects to describe the financial impact of the earthquake and tsunami in further detail during its first quarter 2011 earnings call in May.