ON Semiconductor Corporation

Good day, and thank you for standing by. Welcome to the OnSemi first quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Farag Agarwal, Vice President on Investor Relations and Corporate Development. Please go ahead.

Thank you, Daniel. Good afternoon, and thank you for joining our semis first quarter results conference call. I'm joined today by Hassan Al-Khawri, our President and CEO, and Pat Grant, our CFO. This call is being webcast on the Investor Relations section of our website at www.onsami.com. A replay of this webcast, along with our first quarter earnings release, will be available on our website approximately one hour following this conference call, and the recorded webcast will be available for approximately 30 days following this conference call. Additional information is posted on the investor relations section of our website. Our earnings release and this presentation includes certain non-GAAP financial measures. Reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures and a discussion of certain limitations when using non-GAAP financial measures are included in our earnings release, which is posted separately on our website in the investor relations section. During the course of this conference call, we'll make projections or other forward-looking statements regarding future events or the future financial performance of the company. We wish to caution that such statements are subject to risks and uncertainties that could cause actual events or results to differ materially from projections. Important factors that can affect our business Injury factors that could cause actual results to differ materially from our forward-looking statements are described in our most recent Form 10-K, Form 10-Qs and other findings with the Securities and Exchange Commission and in our earnings release for the first quarter. Our estimates or other forward-looking statements might change and the company assumes no obligation to update forward-looking statements to reflect actual results, shame assumptions, or other events that may occur, except as required by law. Now, let me turn it over to Hassan. Hassan?

Thank you, Parag. Good afternoon to everyone on the call, and thank you for joining us. This quarter marks a clear inflection point for OnSemi, improving demand signals, accelerating AI data center growth, and sustained gross margin expansion demonstrate that the structural changes we made over the past several years are now translating into tangible financial results. We delivered revenue of $1.51 billion and non-GAAP diluted earnings per share of 64%, both above the midpoint of guidance, driven by growth in AI data center. We expanded gross margin for the third consecutive quarter to 38.5%, while returning meaningful capital to shareholders. As volumes recover and new products ramp, our focused portfolio and lean cost structure are driving the operating leverage we designed this model to deliver. Turning to the demand environment, we saw a clear improvement as the quarter progressed, with strengthening order patterns and an increase in short lead time orders. Taken together, these signals give us confidence that this cycle has found its low point and we are now on a path to recovery. On the new products front, our execution on Trello continues to accelerate as the platform moves from product proliferation into ramping revenue and design wins. In the first quarter, revenue increased more than two and a half times sequentially, and we saw broader adoption across high-volume automotive, industrial, and AI applications, with Trello design wins supporting the transition to software-defined vehicles. Programs in our funnel include zonal architectures built on 10-base T1Fs paired with SmartFETs, auto ADAS park assist system using ultrasonic sensing, power management for AI client platforms, and inductive position sensing for humanoids and advanced automation use cases. These wins reinforce Trejo's penetration as customers move to a more centralized compute model with zonal for a scalable, software architecture, and require a faster time to market. Our trail-based driver ICs and inductive position sensing, combined with our gallium nitride products, deliver high power density, efficiency, and ease of use in humanoid applications, AI data centers, and automotive. Our overall GAN solutions design funnel, which includes vertical GAN, now exceeds $1.5 billion, supported by a rich product portfolio spanning 40 to 1200 volts. 10 products already sampling with another 20 sampling in the second half of 2026. With a balanced model that combines internal GAN development and foundry partnerships, we have a differentiated roadmap and resilient supply chain that positions us to begin ramping in these markets with revenue starting in 2027. Diving deeper into automotive, in the first quarter, we began production shipments of our TREO-based 10B-C1S Ethernet solutions for a leading North American customer's next generation zonal architecture. The platform integrates more than 30 TREO devices, enabling in-zone connectivity. Higher energy costs are accelerating EV demand, with cost-optimized EV platforms driving increased adoption of IGBT-based traction inverter solutions. Our latest generation IGBTs deliver a compelling balance of performance, efficiency, and cost, complementing our silicon carbide wins, particularly in front axle applications. During the quarter, we were awarded a new IGBT-based traction inverter program with a North American OEM that is transitioning to direct semiconductor sourcing. As the industry transitions to 900-volt EV architectures led by Chinese OEMs, we are the preferred power solution and are already in production at customers in their next generation of EV platforms, enabling flash charging and higher efficiency for a longer drive range. Our China automotive revenue grew year over year in Q1, despite the decline in the China passenger vehicle market of 6% for the same period. Our silicon carbide share of new EV models deployed at the 2026 Beijing Auto Show in April is approximately 55%. Recent expanded collaborations with Geely and NIO highlight our role in enabling these customers to scale globally with their next generation 900 volt platforms. The latest reports from the China Association of Automobile Manufacturers highlight continuous strength in new energy vehicle exports in the first quarter, supporting our view that EV adoption is extending beyond the China domestic market. With ongoing fuel supply disruption and elevated energy costs, we expect demand for high-efficiency EV platforms and silicon carbide content to remain durable, supporting long-term growth opportunities for OnSemi in automotive power globally. Turning to AI data centers, our revenue grew more than 30% quarter over quarter, nearly double our expected growth rate entering the quarter, driven by a broader adoption across the power tree with multiple XPU vendors and all the leading hyperscalers. Looking ahead, we now expect our AI data center revenue to double year over year in 2026. As the only broad-based US power semiconductor supplier, OnSemi continues to build a leading position in AI data centers across the full set of power capabilities required to modernize the power tree, including high voltage conversion, intelligent power stages, protection and control, and system-level integration from the grid to the processor. As policymakers push for greater transparency in the U.S. data center energy use, it reinforces a trend we have been aligned with for some time. OnSemi's power portfolio helps hyperscalers overcome power density and efficiency constraints, reducing losses from the grid to the processor. we are engaged with all major power supply vendors serving every major AI hyperscaler. With FlexPower, for example, our partnership now spans more than 30 active programs across intermediate bus converters, power supplies, battery backup, super capacitors, and next generation 800 volt DC architectures. The AI halo effect continues to drive incremental demand in adjacent infrastructure markets, particularly energy storage systems as rising energy costs and declining battery prices accelerate project economics. Driven by our differentiated SICK hybrid modules, we are seeing renewed growth in our string ESS and microgrid business globally from China to North America. We now expect to outpace the power semiconductor growth for this market in 2026 with more than 40% revenue growth year over year and a market share approaching 60% and are now ramping revenue for a large U.S. OEM's microgrid deployment. Our announcement with Senang Electric highlights our hybrid power integrated modules, combining elite SICK technology and FS7 IGBTs, enabling higher efficiency and higher power density for utility scale solar inverters and liquid cooled energy storage platforms. These solutions deliver the best system level electrical and thermal performance and reinforce our position as a technology partner of choice as customers scale next-generation renewable and storage deployments. Turning to sensing, we are delivering a multimodal sensing capability that customers can deploy across industrial autonomy, automotive sensing, and emerging robotics applications. We secured a meaningful design win with a leading global robotics platform where our high-resolution image sensor and indirect time-of-flight technology were selected to enable reliable depth perception and navigation in autonomous systems. Our roadmap spans complementary modalities, including high-resolution imaging, depth, and other sensing approaches like SWIR that are designed to work together with automotive-grade reliability and long lifetime performance. As we move forward, we are encouraged by improving market conditions and the momentum we are seeing across our highest value applications. Our continued evolution towards a product and solution-centric portfolio, combined with disciplined investment decisions and our fab right actions, is strengthening our operating model and enhancing margin durability. We are executing a clear strategy with deeper customer intimacy and a portfolio aligned to the most important long-term power and sensing transitions. This positions us well to deliver sustainable growth, expanding profitability, and long-term value creation. I'll now turn it over to Thad to give you more details on our results and guidance for the second quarter. Thanks, Hassan.