Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - ON SEMICONDUCTOR CORP | d8k.htm |
| EX-99.1 - PRESS RELEASE - ON SEMICONDUCTOR CORP | dex991.htm |
| EX-99.2 - CONFERENCE CALL SCRIPT FOR JULY 15, 2010 - ON SEMICONDUCTOR CORP | dex992.htm |
 1
The Power of
ON Semiconductor
Investor Presentation
July 2010
SANYO
Semiconductor
Co., Ltd.
Exhibit 99.3 |
 2
Forward Looking Statements
This presentation contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements include, but are not limited to, statements related to the
proposed transaction between ON Semiconductor and SANYO Electric and
expected benefits of such transaction. These forward-looking statements
are based on information available to ON Semiconductor as of the date of
this presentation. Forward-looking statements involve a number of risks and
uncertainties that could cause actual results to differ materially from those
anticipated by these forward-looking statements. Such risks and
uncertainties include a variety of factors, some of which are beyond ON
Semiconductor’s or control. Information concerning additional factors
that could cause results to differ materially from those projected in the
forward-looking statements is contained in ON Semiconductor’s Annual
Report on Form 10-K, as filed with the Securities and Exchange Commission (the
“SEC”) on February 25, 2010, Quarterly Reports on Form 10-Q,
Current Reports on Form 8-K and other of ON Semiconductor’s SEC
filings. Please refer to the end of these presentation materials for
additional important information regarding forward-looking statements
included in these presentation materials. |
 3
A Winning Combination
More Than 100 Years of Semiconductor Expertise
•
World class, high volume, cost effective
products
•
Leader in:
–
Automotive, Computing, Consumer and
Communications end markets
–
Power management
–
Manufacturing excellence
Annualized Revenue:
~$2.3Bn
Annualized Gross Profit:
$973MM
Annualized Operating Income:
$453MM
•
Extensive analog IC product portfolio
–
Including energy efficient components
•
Strong position in Consumer and Automotive end
markets
•
Longstanding customer relationships with
Japanese and Asian electronics leaders
•
Business essentially breakeven today before
manufacturing integration
SANYO Semiconductor
Co., Ltd.
+
A New Global Leader
Emerges
•
Approximately $3.5 billion in Pro Forma revenue,
based on annualized most recent quarter sales
•
Manufacturing, operating expense, and capital
expenditure cost savings
•
Comprehensive product portfolio / end-market
coverage
•
Cross-selling opportunities
•
Expanded addressable market
Annualized Revenue:
~$1.2Bn
Annualized Gross Profit:
$348MM
Annualized Operating Income:
$16MM
Note: Annualized financials based on Second Fiscal Quarter 2010 estimates. ON Semiconductor
estimates based on mid-point of guidance given for Second Fiscal Quarter 2010, and confirmed in
press release dated 7/15/2010. SANYO Semiconductor estimates based on company guidance. See page 4 of
this presentation. |
 4
Pro Forma Financials
Revenue
$573
$2,290
$1,216
$3,506
Gross Margin
42.5%
42.5%
28.6%
37.7%
Op. Income
$113
$453
$16
$469
Op. Inc. Margins
19.8%
19.8%
1.3%
13.4%
Employees
13,200
9,409
22,609
High Cost
~3,700
~4,900
~8,600
Low Cost
~9,500
~4,509
~14,009
($MM)
•
Significant Pro Forma revenue scale, with over $3.5 billion in combined annualized
revenue •
SANYO Semiconductor gross margin expansion to be achieved through operational cost
savings •
SANYO Semiconductor operating expenses as a % of sales to be brought in-line
with ON Semiconductor over time
SANYO
(2)
ON
Semiconductor
(1)
Combined
(3)
Estimated June Quarter Annualized
Q2’10 Guidance
Notes:
(1) Annualized financials based on Second Fiscal Quarter 2010 estimates. ON Semiconductor estimates
based on mid-point of guidance given for Second Fiscal Quarter 2010, and confirmed in press release dated 7/15/2010.
(2) Annualized financials based on June 2010 Quarter estimates. SANYO Semiconductor estimates based on
company guidance. (3) Represents combined annualized estimated financials for June 2010 Quarter
for ON Semiconductor and SANYO Semiconductor. |
 5
Est. Unaudited Net Assets to be Acquired at Close
Notes:
(1)
Represents
estimated
Balance
Sheet
as
of
closing.
As
part
of
purchase
accounting,
the
assets
and
liabilities
will
be
“fair
valued”
pursuant
to
an
appraisal.
Balance
sheet
information
based
on
SANYO
estimates
and
purchase
agreement. |
 6
Total payment of ~$366MM (~¥33.0Bn) at closing
~$129MM (~¥11.6Bn) of cash; and up to ~$238MM (~¥21.4Bn) of ON
Semiconductor common stock, or cash
Assumption of ~$245MM (~¥22Bn) of net liabilities
Consideration
Brand & IP
SANYO Semiconductor name available for 3 years post closing
SANYO Semiconductor to have extensive IP portfolio >6,500 patents
Anticipated Close
and Conditions
By the end of calendar year 2010
Transaction is subject to various closing conditions and regulatory
approval
~35MM shares owned by SANYO Electric equates to approximately 7-8
percent ownership on a fully diluted basis, if stock used as consideration
ON Semiconductor has the option, at its discretion, to use cash in lieu of
all or a portion of the shares
Pro Forma
Ownership
Summary Transaction Terms |
 7
•
Headquarters:
Phoenix, AZ
•
Founded:
Spun-off from Motorola 1999, IPO 2000
•
Employees:
13,200
•
Revenue:
~$2Bn
•
Market
Capitalization:
~$3Bn
•
Cash
&
Equivalents:
$561MM
(1)
•
Debt:
$935MM
(1)
ON Semiconductor Today
Low & Medium MOSFET
Analog Automotive
Auto Power
LDO & Vregs
Automotive
DC
DC Conversion
Analog Switches
AC-
DC Conversion
Low Voltage
Standard Logic
Power Switching
Signal & Interface
-
Medical
Integrated Sensor Products
Military & Aerospace
Industrial
Communications & High
Voltage
High Frequency
Foundry
Bipolar Power
Thyristor
Small Signal
Zener
Protection
Rectifier
Filters
Memory Products
(1) Source: Quarter ended 4/2/10.
Computing & Consumer
Products (23% of Revenue)
Digital & Mixed
Signal
(22% of Revenue)
Automotive & Power Group
(23% of Revenue)
Standard Products
(32% of Revenue)
-
Products Group
HQ: Phoenix,
AZ
U.S. mfg
facilities: AZ,
ID, and OR
European mfg facilities:
Belgium, Czech Republic,
and Slovakia
Asia / Pacific
mfg
facilities:
China,
Japan,
Malaysia,
and the
Philippines |
 8
Power & Eco:
37%
Mobile:
12%
Auto:
13%
Other:
31%
Asian Manufacturers:
35%
Japanese Manufacturers:
61%
Hyper Device (Discrete):
24%
Hybrid IC:
9%
Custom LSI :
27%
Standard LSI:
40%
SANYO Semiconductor Today
By Region
By Application
Facility
Products
Wafer Size
Wafer Fabs - Japan
Gunma fab
HD/HIC/LSI
4" / 5" / 6"
Niigata fab
LSI
5" / 6"
Gifu fab
HD/LSI
5" / 6"
Back-End Process - Japan
Kitakata fab
LSI
Kasukawa fab
LSI
Hanyu fab
LSI
Back-End Process - Ex-Japan
Thailand fab (SSTH)
HD/HIC/LSI
Shekou fab (SSL)
HD
Tauchung fab (SET)
HD
HK fab (SSEHK)
HD
Philippines fab (SSMP)
HIC/LSI
Vietnam fab (SSV)
HIC
(1)
includes
revenue
from
Amorton
business.
Source: SANYO Semiconductor.
Manufacturing Locations
Revenue Segmentation (FYE March 2010)
(1)
•
Headquarters:
Gunma, Japan
•
Founded:
2006 (predecessor entities date to 1957)
•
Employees (as of Jan. 2010):
–
F/T: 8,206; 2,074 in wafer process manufacturing, and
3,955 in back-end process manufacturing
–
P/T: 1,203; 105 in wafer process manufacturing, and
899 in back-end process manufacturing
•
President:
Teruo
Tabata
•
Business
Overview:
Develops
and
manufactures
semiconductor products focused on power and eco areas;
proprietary analog and power management technologies;
leading customers worldwide
By Business Unit/Product
27%
Standard LSI
9%
Hyper Device
24%
Custom LSI
40%
Hybrid IC
(Discrete)
Asia
Asia (European &
3%
39%
22%
35%
American)
Other
Japan
Asia (Japanese)
1% |
 9
Additional Product Opportunities
•
Acquisition Brings Extensive
Complementary Product Portfolio
•
Numerous Japanese Qualified
Packages
•
Deep Intellectual Property Portfolio,
including >6,500 Patents
•
Complementary Strength in
–
Microcontroller ICs
–
Motor driver ICs
Microcontroller ICs
Motor Driver ICs
Power Supply ICs
Data
Communication
ICs
Hybrid ICs
ASICs
Discrete Devices
Sensors
Video ICs
Audio ICs
Display Driver ICs |
 10
Transaction Rationale
Complementary
Products, Customers
and End-markets
SANYO Semiconductor adds microcontrollers, motor controllers, inverters and other
products
ON Semiconductor is strong in N. America and Europe; SANYO strong in Japan and
Asia Significantly enhances ON Semiconductor’s position in the
Automotive and Consumer markets
Strengthens
Market Position in
Japan and Asia
Provides ON Semiconductor with significant market presence in Japan, the
world’s second largest semiconductor market; ON Semiconductor to be
the 3rd largest U.S. semiconductor
company
operating
in
Japan
(1)
Strengthens ON Semiconductor’s position in Korea, and other key Asian
markets Significant
Shareholder Value
Creation Opportunity
Acquiring approx. $1.2 billion revenue (based on 2Q’10 annualized) at ~0.5x
multiple -
Significantly below recent similar transactions
Acquisition expected to be accretive to earnings approximately twelve months post
close Increased Scale and
Cash Flow Generation
Potential
Pro forma annualized MRQ revenues of $3.5 billion
Pro forma combined post-manufacturing integration GMs to be in 40% range
Near term goal to deliver in excess of $30 million in pre-tax income on a
quarterly basis from SANYO Semiconductor in approximately six quarters
after closing the transaction Leverages Operational
Excellence to
Drive Cost Savings
(1) Source: Gartner, 2010.
Leverages ON Semiconductor’s successful track record of executing operational
restructurings; 7
acquisitions, 8 fab and 2 back-end facilities consolidations
ON Semiconductor to drive manufacturing
integration ON Semiconductor has owned and operated a factory in Japan since
1982
|
 11
Note:
Revenue
breakdown
for
CY2009.
Charts
exclude
approximately
$20
million
manufacturing
services
revenue
for
ON
Semiconductor
in
CY2009.
Source: iSuppli.
A Diversified Product Platform
A Leader in Mixed Signal & Analog Technologies
Integrated
Circuits
71%
Discretes
29%
Integrated
Circuits
82%
Discretes
18%
SANYO
Semiconductor
Co., Ltd.
+
SANYO
Semiconductor
Co., Ltd.
Integrated
Circuits
62%
Discretes
38% |
 Japanese Semiconductor Market
Japan is the World’s Second Largest
Semiconductor Region
Japan Semiconductor Revenue
Source: Gartner Research, 2010.
Japan Semiconductor Market
Expected to Recover Over 2010-12
($Bn)
Global Semiconductor
Market, 2009
2009-12 CAGR: 5%
2009 Sales: $228Bn
Americas
16%
EMEA
14%
Japan
18%
Asia Pacific
52%
12 |
 13
Diversified Geographic Footprint
Global Semiconductor
Market, 2009
Americas
16%
EMEA
14%
Japan
18%
Asia Pacific
52%
Americas
16%
EMEA
11%
Japan
16%
Asia-Pacific
57%
Americas
21%
EMEA
16%
Japan
3%
Asia-Pacific
61%
+
SANYO
Semiconductor
Co., Ltd.
Note:
Revenue
breakdown
for
CY2009.
Charts
exclude
approximately
$20
million
manufacturing
services
revenue
for
ON
Semiconductor
in
CY2009.
Source: iSuppli.
Pro
Forma
Geographic
Footprint
Mirrors
that of Semiconductor Industry |
 14
Balanced End Market Presence
Expanded Presence in Consumer
Strengthened Presence in Automotive
Note: LTM revenue breakdown as of 3/31/10. Charts exclude approximately $19 million
manufacturing services revenue for ON Semiconductor for the LTM period ended 3/31/10.
Sanyo
Semiconductor’s
“Consumer
Electronics”
segment
consists
of
“Video”,
“Audio”,
“Consumer
Electronics”,
and
“Amusement”
segments.
Sanyo
Semiconductor’s
“Computing”
segment
consists
of
“Computer
and
Peripherals”
segment.
ON
Semiconductor’s
“Other”
segment
represents
“Medical”
revenues.
Pro
Forma
“Other”
segment
consists
of
Sanyo
Semiconductor
“Other”
revenues
and
ON
Semiconductor’s
“Medical”
revenues.
Computing
25%
Comms
14%
Consumer
Electronics
27%
Auto
16%
Industrial
Electronics
11%
Other
7%
Computing
26%
Comms
17%
Consumer
Electronics
17%
Auto
18%
Ind.
18%
Other
4%
Computing
22%
Comms
8%
Consumer
Electronics
47%
Auto
12%
Other
11%
SANYO
Semiconductor
Co., Ltd.
+
SANYO
Semiconductor
Co., Ltd. |
 ON
Semiconductor Market Segments Automotive and
Power Regulation
Computing & Consumer
Products
Digital & Mixed-Signal
Products Group
Standard Products
Low & Medium MOSFET
Analog Automotive
Auto Power
LDO & Vregs
Automotive
DC-DC Conversion
Analog Switches
AC-DC Conversion
Low Voltage
Standard Logic
Power Switching
Signal & Interface
Medical
Integrated Sensor Products
(“ISP”)
Military & Aerospace
Industrial Communications &
High Voltage
High Frequency
Foundry
Bipolar Power
Thyristor
Small Signal
Zener
Protection
Rectifier
Filters
Memory Products
$442MM
Revenue:
Note: LTM revenues as of 3/31/10.
$447MM
Revenue:
$425MM
Revenue:
$625MM
Revenue:
15 |
 SANYO Semiconductor Business Units
Hyper Device Division
(Discrete)
HIC Division (Hybrid IC)
Standard LSI Division
Custom LSI Division
For power supply, general,
strobe; Transistor, IGBT
LED driver, MOSFET
Hybrid Products
Sustain driver HIC
Inverter HIC for white goods
Digital amp HIC for audio
Motor driver
Power supply IC
(TV/STB/mobile
System LSI for anti-shake, ESD-
EMI Protection IC
OE-IC for optical pickup
Touch sensor
Tuner device, High frequency IC
(AM/FM)
IC recorder SoC
(Gok-Low)
LSI for image quality adjustment
LSI for door phone
Small package EEPROM (2-
32k)
SPI NOR serial flash memory
Flash/display microcontroller
(8/16 bit)
Custom LSI for car equipment
$267MM
Revenue:
Note: LTM revenues as of 3/31/10. Converted at 90 JPY per USD.
Per SANYO Semiconductor management; excludes Other sales representing ~5% of total
revenue. $95MM
Revenue:
$448MM
Revenue:
$303MM
Revenue:
16 |
 Broad and Deep Customer Relationships
SANYO Semiconductor
Co., Ltd.
17 |
 Leshan, China
Aizu, Japan
Gresham, OR
Phoenix, AZ
Roznov, Czech Republic
Piestany, Slovakia
Seremban, Malaysia
(Site 1 & 2)
Carmona, Philippines
Hong Kong, China
Global Manufacturing Infrastructure
Front-end Facilities:
•
Japan: Niigata, Gunma, Gifu
Back-end Facilities:
•
Japan: Hanyu, Kasukawa
•
China: Hong Kong, Taichung, Shekou
•
Philippines
•
Thailand
•
Vietnam
Philippines
Taichung, China
Shekou, China
Vietnam
Thailand
Japan:
Niigata, Gunma, Gifu, Hanyu, Kasukawa
Back-end Facilities:
•
Leshan, China
•
Seremban, Malaysia (Site-1)
•
Carmona, Philippines
Wafer Facilities:
•
Roznov, Czech Republic
Front-end Facilities:
•
Phoenix, Arizona
•
Gresham, Oregon
•
Aizu, Japan
•
Pietany, Slovakia
•
Seremban, Malaysia (Site-2)
•
Roznov, Czech Republic
SANYO
Semiconductor
Co., Ltd.
SANYO
Semiconductor
Co., Ltd.
Legend
18 |
 10-Year History of Manufacturing Consolidation
19 |
 Significant Revenue Scale
Note:
*
Represents
combined
financials
as
reported
for
the
last
twelve
months
ending
March
2010
for
ON
Semiconductor
and
SANYO
Semiconductor.
($ in millions)
Combined Company Generates
Economies of Scale and
Improved Financial Performance
20
SANYO
/ |
 21
Creating Shareholder Value
•
SANYO
Semiconductor
business
acquired
for
0.5x
AV
/
LTM
Revenue;
a
reasonable
price
relative
to
other
similar
businesses
–
Weighted Average Aggregate Value / LTM Revenue multiple paid in three recent
relevant semiconductor
acquisitions
was
5.0x
(1)
•
ON Semiconductor uniquely positioned to drive
manufacturing integration and
improved
financial
performance
at SANYO Semiconductor
–
Similar process technology roadmaps and assembly and test requirements
–
Extensive experience rationalizing manufacturing facilities
–
Experience operating manufacturing infrastructure worldwide, including in
Japan –
Gives SANYO Semiconductor access to ON Semiconductor’s leading edge Gresham
facility •
Post-restructuring, combined business to achieve similar financial profile to
ON Semiconductor
today
with
significantly
greater
scale,
diversity
and
growth
opportunities
–
$3.5Bn annualized revenues; significant manufacturing and operating expense saving
opportunity –
Enhanced position in Asia-Pacific; region experiencing above-average
economic growth Significant Long Term Stock Price Appreciation Potential
Note:
(1) Based on weighted average AV / LTM revenue multiple paid in Maxim/Teridian, Intersil/Techwell, and
Semtech/Sierra Monolithics transactions. |
 22
A Winning Combination
SANYO
Semiconductor
Co., Ltd.
Complementary Products, Customers and End-markets
Strengthens Market Position in Japan and Asia
Leverages Operational Excellence to Drive Cost Savings
Increased Scale and Cash Flow Generation Potential
Significant Shareholder Value Creation Opportunity |
 23
Forward Looking Statements
This presentation contains forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements include, but are not
limited to, statements related to the proposed transaction between ON Semiconductor and SANYO
Electric, including the actual amount of consideration to be received by SANYO Electric in the
transaction; the closing and the anticipated timing of the closing and the effects of the proposed
transaction on ON Semiconductor. Forward-looking statements also include statements
regarding the potential benefits of the transaction, including the combined businesses’
projected and pro forma revenue, gross margin, cash flow and other financial results; expected cost savings, economies
of scale, cross selling opportunities and expansion of addressable market; the goal to deliver in
excess of $30 million in pre-tax income on a quarterly basis approximately six quarters
after closing; expected rates of post-manufacturing integration; the expectation that the
transaction will be accretive to ON Semiconductor approximately twelve months after the closing; the expected
recovery of the Japan semiconductor market and increases to the region’s capital spending; the
combined businesses’ integration plans and ON Semiconductor’s positioning to realize
greater scale, diversity and growth opportunities and significant long term stock price
appreciation potential. These forward-looking statements are based on information available to ON Semiconductor as of the
date of this presentation. Forward-looking statements involve a number of risks and
uncertainties that could cause actual results to differ materially from those anticipated by
these forward-looking statements. Such risks and uncertainties include a variety of factors,
some of which are beyond ON Semiconductor’s control. In particular, such risks and uncertainties
include difficulties encountered in integrating acquired businesses; the risk that the
transaction does not close when anticipated, or at all; pricing and demand for semiconductor
products; dependence on each company’s ability to successfully manufacture in increasing volumes on a cost-
effective basis and with acceptable quality for its current products; the adverse impact of increased
competition; changes in overall economic conditions and markets, including the current credit
markets; changes in demand for ON Semiconductor 's or SANYO Semiconductor's products; changes
in customers’ purchasing habits or procedures; technological and product development risks;
availability of raw materials; changes in manufacturing yields; control of costs and expenses;
significant litigation; risks associated with acquisitions and dispositions; risks associated
with leverage and restrictive covenants in debt agreements; risks associated with international
operations including foreign employment and labor matters associated with unions and collective bargaining
agreements; the threat or occurrence of international armed conflict and terrorist activities both in
the United States and internationally; and risks involving environmental or other governmental
regulation. Information concerning additional factors that could cause results to differ
materially from those projected in the forward-looking statements is contained in ON Semiconductor’s
Annual Report on Form 10-K as filed with the Securities and Exchange Commission (the
“SEC”) on February 25, 2010, Quarterly Reports on Form 10-Q, Current Reports on
Form 8-K and other of ON Semiconductor’s SEC filings. These forward-looking
statements should not be relied upon as representing ON Semiconductor’s views as of any
subsequent date and neither undertake any obligation to update forward-looking statements
to reflect events or circumstances after the date they were made.
|