ON Semiconductor to Acquire Catalyst Semiconductor, Inc. in an All-Stock Transaction

PHOENIX, & SANTA CLARA, Calif.–(EMWNews)–ON Semiconductor Corporation (Nasdaq: ONNN) and Catalyst Semiconductor,

Inc. (Nasdaq: CATS) today announced the signing of a definitive merger

agreement providing for the acquisition of Catalyst Semiconductor by ON

Semiconductor in an all-stock transaction in which Catalyst shareholders

will receive 0.706 shares of ON Semiconductor common stock for each

share of Catalyst common stock they own. This represents an equity value

of approximately $115 million and an enterprise value of approximately

$85 million.

“The acquisition of Catalyst Semiconductor

will add to our high gross margin analog and mixed-signal product

offerings for the digital consumer and wireless end-markets,”

said Keith Jackson, ON Semiconductor president and CEO. “Catalyst

Semiconductor’s analog and mixed-signal

business represented more than $11 million in sales as of their April

2008 fiscal year end – a business that grew more than 90 percent versus

the prior year. Catalyst Semiconductor’s

EEPROM technology will strengthen our custom application-specific

circuits (ASIC) and power products capabilities expanding our ability to

more comprehensively address our customers’

needs. With the combination of ON Semiconductor’s global footprint,

effective channels of distribution, and top-tier customer relationships,

we expect to be able to support a broader and deeper penetration of

Catalyst’s overall product portfolio. This should enable us to

accelerate their revenue growth and increase market share. We also

believe additional revenue from Catalyst Semiconductor’s

strong portfolio offering will benefit from ON Semiconductor’s

manufacturing capabilities. We look forward to welcoming Gelu Voicu,

Catalyst Semiconductor’s CEO, as well as the

talented Catalyst employee base to ON Semiconductor.”

“This transaction represents a compelling

opportunity for Catalyst employees, customers and shareholders,”

stated Gelu Voicu, CEO of Catalyst Semiconductor. “To

compete successfully in today’s global

marketplace, size and scale are very important. We are pleased to become

part of a leading global company in the semiconductor sector. ON

Semiconductor’s world-class operational

capabilities and supply chain will enable Catalyst Semiconductor’s

products to better penetrate the automotive, consumer, and industrial

end-markets utilizing ON Semiconductor’s

global customer and channel footprint.“

Transaction Details

Under the terms of the agreement, which has been approved by both boards

of directors, the fixed exchange ratio will be 0.706 shares of ON

Semiconductor common stock for each share of Catalyst Semiconductor

common stock. Based on the closing stock price of ON Semiconductor on

July 16, 2008, this represents a value to Catalyst Semiconductor

shareholders of approximately $6.24 per share. Upon completion of the

transaction, ON Semiconductor will issue approximately 13 million shares

of common stock on a fully diluted basis to complete the transaction or

approximately 3 percent of ON Semiconductor’s

fully diluted shares outstanding.

The transaction is subject to the approval of shareholders of Catalyst

Semiconductor as well as customary closing conditions and regulatory

approvals. The companies expect the transaction to close in the fourth

quarter of 2008. Upon closing, ON Semiconductor may record a one-time

charge for purchased in-process research and development expenses and

other deal related costs. The amount of that charge, if any, has not yet

been determined.

“This acquisition is directly aligned with

both our strategic and financial goals,” said

Donald Colvin, ON Semiconductor executive vice president and CFO. “Net

of cash and short term investments of approximately $30 million at the

end of April 2008, the transaction value represents approximately 1.1

times trailing twelve month sales. We also believe ON Semiconductor’s

operational strengths will significantly benefit the revenue and margin

potential of Catalyst Semiconductor. Excluding the impact of

amortization expense, write-up of inventory to fair market value,

one-time and other deal related charges discussed above, we expect the

acquisition will have minimal impact to earnings per share in the first

year post the transaction close and should be accretive to our earnings

per share thereafter. ON Semiconductor’s

business and the integration of AMIS Holdings, Inc. has proceeded as

anticipated and we are comfortable with the guidance and current level

of revenue and earnings expectations provided on our May 5, 2008

conference call. We intend to provide further details on the acquisition

and our second quarter 2008 results on our regularly scheduled quarterly

earnings conference call on Aug. 6, 2008.”

Shares of the combined company will trade on the NASDAQ Global Exchange

under the symbol “ONNN.”

JP Morgan acted as exclusive financial advisor and DLA Piper US LLP

acted as legal counsel to ON Semiconductor. Houlihan Lokey acted as

exclusive financial advisor and O’Melveny &

Myers LLP acted as legal counsel to Catalyst Semiconductor.

Teleconference and Webcast Information

ON Semiconductor will host a conference call for the financial community

at 8:00 a.m. Eastern Time (ET) on Aug. 6, 2008 to discuss this

announcement and ON Semiconductor’s results

for the second quarter of 2008. The company will also provide a

real-time audio broadcast of the teleconference on the Investor

Relations page of its website at http://www.onsemi.com.

The webcast replay will be available at this site approximately one hour

following the live broadcast and will continue to be available for

approximately 30 days following the conference call. Investors and

interested parties can also access the conference call through a

telephone call by dialing (888) 546-9664 (U.S./Canada) or 706-679-4331

(International). In order to join this conference call, you will be

required to provide the Conference ID Number –

which is 56464044. Approximately one hour following the live broadcast,

the company will provide a dial-in replay that will continue to be

available through August 13, 2008. To listen to the teleconference

replay, call 800-642-1687 (U.S./Canada) or 706-645-9291 (International).

You will be required to provide the Conference ID Number –

which is 56464044.

About ON Semiconductor

With its global logistics network and strong product portfolio, ON

Semiconductor (NASDAQ: ONNN) is a preferred supplier of high performance

energy efficient silicon solutions to customers in the power supply,

automotive, communication, computer, consumer, medical, industrial,

mobile phone, and military/aerospace markets. The company’s

broad portfolio includes power, signal management, analog, DSP, advance

logic, clock management and standard component devices. Global corporate

headquarters are located in Phoenix, Arizona. The company operates a

network of manufacturing facilities, sales offices and design centers in

key markets throughout North America, Europe, and the Asia Pacific

regions. For more information, visit http://www.onsemi.com.

About Catalyst Semiconductor

Headquartered in Santa Clara, California, Catalyst Semiconductor designs

and markets analog, mixed-signal and non-volatile memory products,

including Digitally Programmable Potentiometers (DPP™),

white and color LED drivers, DC/DC converters, LDO regulators, voltage

supervisors, bus expanders, serial and parallel EEPROMs, Flash and

NVRAM. Many of Catalyst’s products

incorporate the Company’s Quantum Charge

Programmable™ technology, to deliver Adaptive

Analog™ products, which offer a new level of

customer flexibility, lower power and smaller die size. Catalyst

products are used in telecommunications, computer, automotive,

industrial and consumer markets. Typical applications include LCD

displays, automotive lighting, optical networks, printers, modems,

wireless LANs, network cards, DIMM modules, cellular telephones,

navigation systems, set-top boxes and Internet routers.

This document 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 benefits of the proposed transaction between ON

Semiconductor Corporation (“ON”)

and Catalyst Semiconductor, Inc. (“Catalyst

Semiconductor”) and the future financial

performance of ON. These forward-looking statements are based on

information available to ON and Catalyst Semiconductor as of the date of

this release and current expectations, forecasts and assumptions and

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’s

or Catalyst Semiconductor’s control. In

particular, such risks and uncertainties include difficulties

encountered in integrating merged businesses; the risk that the

transaction does not close, including the risk that the requisite

stockholder and regulatory approvals may not be obtained; the variable

demand and the aggressive pricing environment 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 competitive product announcements;

revenues and operating performance; changes in overall economic

conditions; the cyclical nature of the semiconductor industry; changes

in demand for our products; changes in inventories at customers and

distributors; technological and product development risks; availability

of raw materials; competitors’ actions; pricing and gross margin

pressures; loss of key customers; order cancellations or reduced

bookings; 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; the

threat or occurrence of international armed conflict and terrorist

activities both in the United States and internationally; risks and

costs associated with increased and new regulation of corporate

governance and disclosure standards (including pursuant to Section 404

of the Sarbanes-Oxley Act of 2002); 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’s

Annual Report on Form 10-K as filed with the Securities and Exchange

Commission (the “SEC”)

on February 12, 2008, Quarterly Reports on Form 10-Q, Current Reports on

Form 8-K and other of ON’s SEC filings, and

Catalyst Semiconductor’s Annual Report on

Form 10-K as filed with the SEC on July 3, 2008, Quarterly Reports on

Form 10-Q, Current Reports on Form 8-K and other of Catalyst

Semiconductor SEC filings. These forward-looking statements should not

be relied upon as representing ON’s or

Catalyst 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.

This communication is being made in respect of the proposed transaction

involving ON and Catalyst Semiconductor. In connection with the proposed

transaction, ON plans to file with the SEC a Registration Statement on

Form S-4 containing a Proxy Statement of Catalyst Semiconductor and a

Prospectus of ON and each of ON and Catalyst Semiconductor plan to file

with the SEC other documents regarding the proposed transaction. The

definitive Proxy Statement/ Prospectus will be mailed to stockholders of

Catalyst Semiconductor. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ

THE PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS FILED WITH THE SEC

CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL

CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.

Investors and security holders will be able to obtain free copies of the

Registration Statement and the Proxy Statement/Prospectus (when

available) and other documents filed with the SEC by ON and Catalyst

Semiconductor through the web site maintained by the SEC at www.sec.gov.

In addition, investors and security holders will be able to obtain free

copies of the Registration Statement and the Proxy Statement/Prospectus

(when available) and other documents filed with the SEC from ON by

directing a request to ON Semiconductor Corporation, 5005 East McDowell

Road, Phoenix, AZ, 85008, Attention: Investor Relations (telephone:

(602) 244-3437) or going to ON’s

corporate website at www.onsemi.com,

or from Catalyst Semiconductor by directing a request to Catalyst

Semiconductor, Inc., 2975 Stender Way, Santa Clara, CA 94054, Attention:

Investor Relations (telephone: 408-542-1000) or going to Catalyst

Semiconductor’s corporate website at www.catsemi.com.

ON and Catalyst Semiconductor, and their respective directors and

executive officers, may be deemed to be participants in the solicitation

of proxies in respect of the proposed transaction. Information regarding

ON’s directors and executive officers is

contained in its annual proxy statement filed with the SEC on April 4,

2008. Information regarding Catalyst Semiconductor’s

directors and executive officers is contained in Catalyst Semiconductor’s

annual proxy statement filed with the SEC on August 24, 2007. Additional

information regarding the interests of such potential participants will

be included in the Proxy Statement/Prospectus and the other relevant

documents filed with the SEC (when available).

ON Semiconductor and the ON Semiconductor logo are registered

trademarks of Semiconductor Components Industries, LLC. Catalyst

Semiconductor and the Catalyst Semiconductor logo are registered

trademarks of Catalyst Semiconductor, Inc. All other brand and

product names appearing in this document are registered trademarks or

trademarks of their respective holders. Although ON Semiconductor and

Catalyst Semiconductor reference their respective websites in this news

release, information on those websites is not to be incorporated herein.

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