1097864--2/27/2009--ON_SEMICONDUCTOR

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{debt, indebtedness, cash}

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{product, market, service}

{property, intellectual, protect}

{customer, product, revenue}

{stock, price, operating}

{product, liability, claim}

{financial, litigation, operation}

{acquisition, growth, future}

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{regulation, change, law}

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Trends, Risks and Uncertainties Related to Our Business If deterioration of the economy continues, this could cause additional financial and operational declines, which could lead to unanticipated reductions in our earnings and could result in future goodwill impairments. We have experienced declines in revenues and have incurred operating losses, and we may experience additional declines in revenues and incur additional operating losses in the future. We operate in the highly cyclical semiconductor industry, which is subject to significant downturns. Current economic conditions, including those related to the credit markets, may adversely affect our industry, business and results of operations. The integration of Catalyst and AMIS into our business could result in adverse events and the anticipated benefits of those mergers may not be realized fully or at all or may take longer to realize than expected. We may experience difficulties in operating the Gresham manufacturing facility, including the inability to utilize this additional capacity in a cost-efficient manner and to successfully develop new products which can be manufactured in this facility. Our gross profit is dependent on a number of factors, including our level of capacity utilization. The failure to implement, as well as the completion and impact of, our profitability enhancement programs and cost reductions could adversely affect our business. If we are unable to implement our business strategy, our revenues and profitability may be adversely affected. We may be unable to make the substantial research and development investments required to remain competitive in our business. Uncertainties involving the ordering and shipment of, and payment for, our products could adversely affect our business. An inability to introduce new products could adversely affect us, and changing technologies or consumption patterns could reduce the demand for our products. Competition in our industry could prevent us from maintaining our revenues and from raising prices to offset increases in costs. Unless we maintain manufacturing efficiency, our future profitability could be adversely affected. We could be required to incur significant capital expenditures for manufacturing and information technology and equipment to remain competitive, the failure, inadequacy or delayed implementation of which could harm our ability to effectively operate our business. If we were to lose one of our large customers our revenues and profitability could be adversely affected. The loss of our sources of raw materials or manufacturing services, or increases in the prices of such goods or services, could adversely affect our operations and productivity. We may continue to make strategic acquisitions of other companies or businesses and these acquisitions introduce significant risks and uncertainties, including risks related to integrating the acquired businesses, incurring additional debt, assuming contingent liabilities or diluting our existing stockholders. Our international operations subject us to risks inherent in doing business on an international level that could adversely impact our results of operations. If we fail to attract and retain highly skilled personnel, our results of operations and competitive position could deteriorate. We use a significant amount of intellectual property in our business. Some of that intellectual property is currently subject to disputes with third parties, and litigation could arise in the future. If we are unable to protect the intellectual property we use, our business could be adversely affected. We may not be able to enforce or protect our intellectual property rights, which may harm our ability to compete and adversely affect our business. We are subject to litigation risks, including securities class action litigation, which may be costly to defend and the outcome of which is uncertain. We are exposed to increased costs and risks associated with complying with increasing and new regulation of corporate governance and disclosure standards, including Section 404 of the Sarbanes-Oxley Act. Environmental and other regulatory matters could adversely affect our ability to conduct our business and could require expenditures that could have a material adverse effect on our results of operations and financial condition. Warranty claims, product liability claims and product recalls could harm our business, results of operations and financial condition. Trends, Risks and Uncertainties Relating to Our Indebtedness Our substantial debt could impair our financial condition and adversely affect our ability to operate our business. We may incur more debt and may require additional capital in the future to service this new debt, which could exacerbate the risks described above. The agreements relating to our indebtedness may restrict our current and future operations, particularly our ability to respond to changes or to take some actions. Our failure to comply with the agreements relating to our outstanding indebtedness, including as a result of events beyond our control, could result in an event of default, that could materially and adversely affect our operating results and our financial condition. We may not be able to generate sufficient cash flow to meet our debt service obligations. Trends, Risks and Uncertainties Relating to Our Common Stock Fluctuations in our quarterly operating results may cause our stock price to decline. Our stock price may be volatile, which could result in substantial losses for investors in our securities. Provisions in our charter documents may delay or prevent the acquisition of our company, which could decrease the value of our stock.

Full 10-K form ▸

1097864--2/27/2009--ON_SEMICONDUCTOR_CORP