ON Stock Analysis: SiC Power Semiconductors

Published: [DATE] | Last Updated: [DATE] | Data As Of: [DATE]

onsemi (NASDAQ: ON) is a top-3 global supplier of silicon carbide power semiconductors, with ON stock trading approximately [DATA REQUIRED: % below all-time high] below its late 2021 peak as a multi-year semiconductor inventory correction weighed on both revenue and gross margins. The company's investment case centers on whether the structural improvements made since 2021 will reassert themselves as customers rebuild chip stockpiles and electric vehicle production scales.

onsemi (ON) Stock: Current Price and Key Statistics

onsemi, formerly known as ON Semiconductor Corporation, trades on NASDAQ under the ticker ON and is a member of the S&P 500 index. The table below reflects the most recent available market data; for live premarket and after-hours prices, see Yahoo Finance analyst estimates for ON{target="_blank" rel="noopener noreferrer

Source: Yahoo Finance. Data as of [DATE].

ON stock reached its all-time high of approximately $115–$117 in late 2021 and early 2022, driven by peak EV demand expectations and the broader semiconductor supply shortage premium. In 2024, ON stock [DATA REQUIRED: returned/declined] [DATA REQUIRED]%, compared to the SOXX semiconductor ETF's [DATA REQUIRED]% return over the same period, reflecting inventory correction headwinds specific to power semiconductor end markets. The 52-week range captures the full scope of this pressure.

What Is onsemi? Company Overview and Business Model

onsemi designs and manufactures intelligent power and sensing semiconductors, primarily serving electric vehicle, automotive ADAS, and industrial automation applications. The company trades on NASDAQ as ON and operates three reportable segments: the Power Solutions Group (PSG), Advanced Solutions Group (ASG), and Intelligent Sensing Group (ISG). onsemi is a top-3 global supplier of silicon carbide power devices and holds S&P 500 membership. The former legal name was ON Semiconductor Corporation; the company rebranded to onsemi in 2022.

onsemi's Three Business Segments

onsemi's largest revenue segment, the Power Solutions Group (PSG), produces silicon carbide (SiC) metal-oxide-semiconductor field-effect transistors (MOSFETs, a type of power device used to switch and amplify electrical signals), insulated-gate bipolar transistors (IGBTs, a power device used in industrial motor drives and some EV applications), intelligent power modules (IPMs), and gate drivers for EV and industrial applications. Unlike AI chip companies such as NVIDIA, which design logic processors for data centers, onsemi focuses on power semiconductors: components that control and convert electrical power in physical systems like EV drivetrains and factory equipment. Power semiconductors are valued for energy efficiency and thermal ruggedness rather than processing speed, which is why onsemi trades at a materially lower P/E multiple than AI chip companies. (For context on the AI chip market's different valuation drivers, see our NVIDIA stock price analysis.)

The Advanced Solutions Group (ASG) covers mixed-signal, analog, and embedded products serving automotive electronics, industrial controls, and communications markets. The Intelligent Sensing Group (ISG) produces high-performance image sensors for automotive cameras used in ADAS systems, including lane departure warning, automatic emergency braking, and surround-view parking. ISG's flagship product families include the PYTHON and AR0 sensor series. As vehicles add more cameras per platform (some premium vehicles carry 10 or more cameras), ISG revenue grows proportionally. ISG is a margin-accretive, differentiated segment with high barriers to entry relative to commodity power semis.

Source: onsemi Annual Report [YEAR]. Data as of [DATE].

onsemi operates under a fab-lite manufacturing model, meaning the company owns semiconductor fabrication facilities (fabs) for its most proprietary products, particularly SiC, while outsourcing production of commoditized products to external foundries. This model sits between fully fabless chip designers like Qualcomm and fully integrated device manufacturers (IDMs) like Intel.

The El-Khoury Transformation

Hassane El-Khoury became President and CEO of onsemi in January 2021, arriving from Cypress Semiconductor where he had served as CEO prior to that company's acquisition by Infineon Technologies. El-Khoury arrived with a specific mandate: exit commodity product lines, sell underperforming manufacturing assets, and redirect the company's capacity toward high-margin intelligent power and sensing solutions.

Over the following two years, El-Khoury exited more than 20 commodity analog product lines, divested several legacy fabs, and established long-term supply agreements with major automotive OEMs to create forward revenue visibility. The gross margin result was measurable: from approximately 33% when he arrived, onsemi's gross margin expanded to a peak of roughly 47% by 2022 and 2023. This expansion re-rated ON stock from a commodity semiconductor valuation to a growth premium, a premium that the subsequent inventory correction has partially erased.

onsemi Financial Performance: Revenue, Earnings, and Margins

onsemi's most recent quarterly results are summarized in the table below, sourced directly from the company's earnings press release filed with the SEC as an 8-K.

Source: onsemi Q[X] [YEAR] earnings press release dated [DATE], via SEC EDGAR 8-K filing.

onsemi's most recent quarterly revenue of $[DATA REQUIRED] billion represented a [DATA REQUIRED]% change year-over-year, as the semiconductor inventory correction continued to reduce order rates from automotive and industrial customers. Management guided next-quarter revenue of $[DATA REQUIRED] billion to $[DATA REQUIRED] billion, compared to the analyst consensus estimate of $[DATA REQUIRED] billion at the time of issuance, per the company's earnings press release dated [DATE].

Diluted EPS on a GAAP basis was $[DATA REQUIRED], while non-GAAP adjusted EPS was $[DATA REQUIRED]; the primary reconciliation item between the two figures is stock-based compensation expense. onsemi's share buyback program mechanically reduces diluted share count over time, which supports EPS even during periods of flat or declining revenue.

Gross Margin: The Bull Thesis in Numbers

onsemi's gross margin trajectory is the most important financial story for long-term investors. From approximately 33% when El-Khoury took the helm in January 2021, gross margins expanded to a peak of roughly 47% by 2022 and 2023, a gain of approximately 14 percentage points driven by deliberate strategic choices rather than cyclical demand.

The mechanism was clear: El-Khoury exited more than 20 commodity analog product lines that carried gross margins below 30%, sold or wound down several manufacturing agreements for third-party products, and reallocated fab capacity toward SiC power devices and image sensors, both of which carry materially higher margins. This mix shift, combined with the pricing discipline that long-term supply agreements with automakers provided, drove the expansion.

The inventory correction that began in 2022 has since compressed margins back toward the 40–45% range, creating the central debate for ON stock investors: is the structural improvement permanent, or was it partly cyclical? Management's public long-term gross margin target is [DATA REQUIRED: from most recent earnings call or investor day], which would imply a specific forward earnings power calculation. As of the most recent quarter, gross margin stands at [DATA REQUIRED]%, compared to [DATA REQUIRED]% for STMicroelectronics and a negative gross margin for Wolfspeed, which remains in a capital-intensive build phase.

onsemi's forward P/E ratio of [DATA REQUIRED]x compares to [DATA REQUIRED]x for the SOXX semiconductor ETF median and [DATA REQUIRED]x for STMicroelectronics, per [DATA REQUIRED] consensus data as of [DATE]. Free cash flow (operating cash flow minus capital expenditures) for the trailing twelve months (TTM, the most recent four fiscal quarters) was $[DATA REQUIRED], per the most recent 10-Q cash flow statement. Capex is elevated due to SiC manufacturing capacity investments, so FCF runs below EBITDA; this reflects intentional strategic investment, not financial weakness.

Does onsemi Pay a Dividend?

onsemi does not pay a cash dividend. The company returns capital to shareholders primarily through share repurchases. The board has authorized a share repurchase program totaling $[DATA REQUIRED], of which $[DATA REQUIRED] remains available as of the most recent 10-Q filing. Investors seeking income from their semiconductor holdings should treat onsemi as a growth and buyback stock, not a dividend stock.

onsemi's Silicon Carbide Strategy and EV Market Positioning

onsemi's investment thesis centers on silicon carbide (SiC), a wide-bandgap semiconductor material that enables power devices to operate at higher voltages, temperatures, and switching frequencies than traditional silicon. SiC is the preferred material for the main traction inverters in battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs); mild hybrids running on 48-volt architectures use lower-power silicon-based components and do not generate the same content-per-vehicle opportunity.

Why Silicon Carbide Matters for Electric Vehicles

The main traction inverter, the power electronics module that controls an EV's electric motor, represents the largest SiC content opportunity per vehicle. According to analyst estimates, onsemi's semiconductor content per BEV ranges from approximately $400 to $800, compared to roughly $50 to $100 in a traditional internal combustion engine vehicle. The traction inverter alone accounts for an estimated $150 to $300 of that SiC content. Beyond the inverter, onsemi supplies onboard chargers (OBC), DC-DC converters, and battery management systems (BMS) to round out the powertrain electronics bill.

SiC MOSFETs are displacing older insulated-gate bipolar transistors (IGBTs) in high-performance EV applications because SiC operates at higher switching frequencies with lower energy losses, translating directly into longer driving range per charge. This technology displacement is the structural demand driver underpinning the bull thesis for ON stock.

The global automotive semiconductor market is projected to grow from approximately $50 billion in 2023 to over $80 billion by 2030, driven by EV adoption and rising ADAS content per vehicle, per S&P Global Mobility estimates. onsemi's participation sits specifically in the power semiconductor and image sensor portions of that market, not in microcontrollers or connectivity chips dominated by other large chipmakers including Renesas, NXP, and Infineon. onsemi also supplies power semiconductors and sensing solutions to industrial automation applications including factory robots, servo motor drives, and renewable energy systems such as solar inverters; the industrial segment has been more severely affected by the inventory correction than automotive, and industrial recovery timing remains a watchpoint for the stock's near-term revenue trajectory.

onsemi's EliteSiC Strategy and Manufacturing Moat

onsemi's EliteSiC product line is the commercial face of its SiC strategy, competing directly with STMicroelectronics and Wolfspeed for design wins at major global automakers. A design win occurs when an automaker selects onsemi's SiC devices for a specific vehicle platform, typically guaranteeing multi-year revenue once the vehicle enters production.

onsemi's manufacturing approach creates a differentiated position. Under the fab-lite model, onsemi controls the entire SiC production chain from boule growth (manufacturing the raw SiC crystal from which substrates are sliced) through substrate preparation, wafer fabrication, and device packaging. This vertical integration gives onsemi cost visibility and supply chain control that purely fabless SiC competitors cannot match, and it produces substrate economics that improve with scale.

Long-term supply agreements (LTSAs) with major automotive OEMs provide multi-year revenue visibility that smooths the cyclical revenue patterns typical of semiconductor companies. These agreements, signed during the EV supply buildout period, give investors a forward indication of booked demand separate from spot order trends. onsemi has referenced an LTSA backlog in multiple earnings presentations, though specific customer names and contract values are not publicly disclosed.

onsemi's U.S.-based SiC manufacturing, including its Hudson, New Hampshire facility, positions the company to benefit from the CHIPS and Science Act of 2022, which provides approximately $52 billion in grants and tax incentives for domestic semiconductor manufacturing investment. This policy backdrop is a supporting tailwind, not a primary near-term earnings catalyst.

EV Market Exposure: Bull Case and Bear Case

Automotive revenue represented approximately [DATA REQUIRED]% of onsemi's total revenue in fiscal [DATA REQUIRED], per the company's annual report, establishing the EV and automotive ADAS market as the dominant revenue driver. onsemi's customer base spans both Western OEMs and Chinese EV manufacturers, the latter of which have been among the most aggressive adopters of SiC inverter technology.

The bull case rests on the structural expansion of SiC content per vehicle as EV production volumes scale globally. EV sales growth has expanded the addressable market for onsemi's power devices; for broader context on the EV market trajectory and its largest OEM participants, see our Tesla stock price analysis.

The bear case for EV exposure is equally specific. EV adoption in Western markets grew below initial analyst expectations in 2023 and 2024, causing onsemi's largest automotive customers to reduce near-term order rates even as long-term EV trends remained intact. Chinese EV manufacturers, which had been aggressive purchasers of SiC, also destocked through 2023 and 2024 as their production plans moderated. The inventory correction and EV demand moderation are related but distinct headwinds, and both pressured onsemi's automotive segment revenue during this period.

onsemi vs. Competitors: How ON Stacks Up Against STMicroelectronics and Wolfspeed

onsemi competes in the SiC power semiconductor market against two primary publicly traded peers: STMicroelectronics (NYSE: STM) and Wolfspeed (NYSE: WOLF, formerly known as Cree before its 2021 rebrand). All three companies rank among the top-3 global SiC suppliers by revenue, according to Yole Intelligence market data.

Source: Yahoo Finance, FactSet. Data as of [DATE]. WOLF forward P/E is not applicable due to negative earnings; EV/EBITDA is the relevant comparison metric. onsemi row bolded for scannability.

Who Are onsemi's Main Competitors?

onsemi's primary SiC competitors are STMicroelectronics (STM) and Wolfspeed (WOLF), but the company also faces competition from Infineon Technologies, ROHM Semiconductor, and Renesas Electronics in broader power semiconductor markets, and from emerging Chinese manufacturers including SICC and BYD Semiconductor in the longer term.

• STMicroelectronics (NYSE: STM): A Franco-Italian diversified chipmaker and top-3 SiC supplier with strong exposure to European automotive OEMs including Stellantis and Ferrari. STM represents the most direct competitive comparison to onsemi: both are profitable, diversified chipmakers deeply embedded in automotive supply chains.
• Wolfspeed (NYSE: WOLF): The only major publicly traded pure-play SiC company. Wolfspeed carries substantial debt from its Mohawk Valley fab construction and has operated at a net loss, making it a higher-risk exposure to the same SiC megatrend.
• Infineon Technologies, ROHM Semiconductor, Renesas Electronics: Diversified semiconductor companies that compete with onsemi's PSG segment in industrial and automotive power management applications.
• SICC, BYD Semiconductor: Emerging Chinese SiC manufacturers developing domestic supply chain alternatives for Chinese EV OEMs, representing a longer-term structural risk to onsemi's China revenue.

ON stock's performance relative to the SOXX semiconductor ETF benchmark reflects onsemi's specific inventory correction exposure, which has been more pronounced than the broader semiconductor sector given onsemi's concentration in automotive and industrial power semis.

onsemi vs. Wolfspeed: Key Investment Differences

The most investor-relevant difference between onsemi and Wolfspeed is financial: onsemi generates positive earnings and free cash flow, while Wolfspeed has operated at a net loss as it funds construction of its Mohawk Valley fab in Marcy, New York. Wolfspeed (formerly Cree, a name some investors may recognize from LED lighting before that business was divested) is a pure-play SiC company with no revenue diversification outside of the SiC market.

From an investment perspective, both companies offer exposure to the same SiC power semiconductor demand thesis, but with different risk profiles. onsemi's diversified revenue base (automotive, industrial, ASG mixed-signal, ISG image sensors) provides earnings stability that Wolfspeed lacks. Wolfspeed's thesis rests on its Mohawk Valley fab ramping to full capacity and achieving profitability, a path that carries execution risk and meaningful balance sheet debt. If Wolfspeed struggles to ramp, onsemi's established customer relationships and profitability position it to capture market share.

onsemi vs. STMicroelectronics: Where They Diverge

STMicroelectronics and onsemi are the two most comparable companies in the SiC market: both are profitable, diversified chipmakers with large automotive customer bases. Their key differences are geographic customer concentration and gross margin trajectory.

STM's SiC revenue is weighted toward European automotive OEMs, reflecting the company's Franco-Italian industrial roots and long-standing relationships with Stellantis-group manufacturers. onsemi's customer mix spans U.S. and Asian OEMs more broadly, giving it different regional EV cycle exposure. STM has also faced its own gross margin pressures from the SiC inventory correction, providing context that the challenges are industry-wide rather than onsemi-specific. STM's forward P/E of [DATA REQUIRED]x and gross margin of [DATA REQUIRED]% are the most relevant comparison points when evaluating onsemi's valuation relative to a direct peer.

Why Has onsemi Stock Declined? Recent Performance and Key Catalysts

ON stock has declined approximately [DATA REQUIRED]% from its all-time high of roughly $115 reached in late 2021, primarily because of the 2022–2024 semiconductor inventory correction, which caused onsemi's customers to draw down excess chip stockpiles rather than place new orders, compressing both revenue and gross margins from their peak levels. A secondary pressure came from slower-than-expected EV adoption in Western markets in 2023 and 2024, which reduced the near-term demand signal for SiC power devices.

The Semiconductor Inventory Correction Explained

The semiconductor inventory correction refers to the period when automotive and industrial customers, having accumulated excess SiC and power semiconductor inventory during the 2020–2021 chip shortage, reduced their order rates to work through existing stockpiles before resuming normal purchasing. This is a downstream customer phenomenon: the customers have too many chips on hand, so they stop buying even though end demand for vehicles and equipment continues.

The 2022–2024 correction hit onsemi's industrial segment more severely than automotive, because industrial customers had built larger inventory buffers relative to their consumption rates. onsemi's revenue declined from a peak of approximately $[DATA REQUIRED] billion in [DATA REQUIRED] to $[DATA REQUIRED] billion in the trailing twelve months, per the company's SEC filings. Gross margins compressed from the 47% peak back toward the 40–45% range as factory utilization rates fell and fixed manufacturing costs were spread over lower production volumes.

The timing of the inventory correction recovery remains uncertain. Management has cited [DATA REQUIRED: specific recovery indicators from most recent earnings call] as signals they are monitoring; analyst estimates for normalization range from [DATA REQUIRED] to [DATA REQUIRED], per consensus data. This uncertainty is the primary reason ON stock's valuation multiple has compressed from its peak levels.

ON stock has also posted rallies during this period when positive catalysts emerged. Historically, ON shares have moved higher following strong earnings beats that exceeded guidance, SiC design win disclosures at major automotive OEMs, analyst upgrades tied to recovery timeline revisions, and broader sector rotations into semiconductor stocks. These upside catalysts remain active for investors tracking the inventory normalization timeline.

China Revenue Exposure

China-based customers represented approximately [DATA REQUIRED]% of onsemi's total revenue in fiscal [DATA REQUIRED], per the geographic information footnote in onsemi's most recent 10-K on SEC EDGAR{target="_blank" rel="noopener noreferrer

On the revenue side, Chinese EV manufacturers have been among onsemi's most active SiC customers, driving a portion of the automotive revenue growth during the 2021–2022 period. On the risk side, three specific scenarios threaten that revenue: first, Chinese EV OEMs are actively building domestic SiC supply chains through companies like SICC and BYD's internal semiconductor program; second, escalating U.S.-China technology tensions raise the possibility of export control expansion to cover power semiconductors; third, Chinese EV producers' inventory destocking in 2023 and 2024 directly reduced onsemi's order volumes regardless of geopolitical factors.

In a downside scenario in which Chinese EV manufacturers successfully localize their SiC supply chains within three to five years, onsemi's approximately [DATA REQUIRED]% China revenue would face structural displacement risk beyond what a cyclical inventory recovery would address.

Recent News and Upcoming Earnings

The items below reflect the most significant recent catalysts for ON stock. This section is flagged for editorial review and update following each quarterly earnings report.

• Most Recent Earnings: The Q[DATA REQUIRED] [DATA REQUIRED] earnings report, released [DATA REQUIRED], showed revenue of $[DATA REQUIRED] billion versus the analyst consensus estimate of $[DATA REQUIRED] billion, with management guiding Q[DATA REQUIRED] revenue of $[DATA REQUIRED] billion to $[DATA REQUIRED] billion.
• Analyst Rating Changes: [DATA REQUIRED: most recent upgrade/downgrade with firm name and date]
• SiC Design Win Announcements: [DATA REQUIRED: most recent publicly disclosed design win or LTSA reference]
• EV Market Data: [DATA REQUIRED: most recent IEA or BloombergNEF EV adoption data point affecting sector sentiment]
• Next Earnings Date: onsemi's next scheduled earnings report covers [DATA REQUIRED] and is expected to be released [DATA REQUIRED] (pre-market / post-market). The key metrics to watch are the revenue recovery rate versus consensus, gross margin trajectory, and next-quarter guidance relative to analyst expectations. The next earnings date can be confirmed at the onsemi Investor Relations earnings calendar{target="_blank" rel="noopener noreferrer

Wall Street Analyst Ratings and Price Targets for ON Stock

Of the [DATA REQUIRED] analysts currently covering onsemi, [DATA REQUIRED] rate the stock Buy or Outperform, [DATA REQUIRED] rate it Hold or Neutral, and [DATA REQUIRED] rate it Sell or Underperform, per Yahoo Finance analyst estimates for ON{target="_blank" rel="noopener noreferrer

Source: FactSet/Yahoo Finance consensus as of [DATE]. Analyst price targets are 12-month forward estimates; individual bank methodologies vary.

The consensus 12-month price target for onsemi (ON) stock is $[DATA REQUIRED], implying [DATA REQUIRED]% upside (or downside) from the current price of $[DATA REQUIRED], per FactSet consensus as of [DATE]. The high target of $[DATA REQUIRED] (from [DATA REQUIRED]) reflects the bull case in which inventory normalization and SiC design win ramps restore gross margins toward the 47% peak; the low target of $[DATA REQUIRED] (from [DATA REQUIRED]) reflects the bear case in which the inventory correction proves prolonged and China revenue faces structural pressure.

Analyst EPS estimates for the next fiscal year stand at $[DATA REQUIRED] per diluted share on a non-GAAP basis, per FactSet consensus as of [DATE]. EPS estimate revisions over the past 90 days have trended [DATA REQUIRED: upward/downward], which is a meaningful sentiment signal given that revision direction often precedes stock price direction in semiconductor stocks. At the consensus 12-month price target, ON would trade at approximately [DATA REQUIRED]x forward earnings.

If the inventory correction normalizes by [DATA REQUIRED] and gross margins recover toward the 47% range, the bull case scenario would support analyst price targets at the high end of the range. If EV demand growth in Western markets remains below the consensus long-term trajectory and China revenue faces continued headwinds through [DATA REQUIRED], the bear case target would be more relevant. These scenarios are conditions, not predictions; the actual outcome depends on variables that analysts themselves disagree on.

Is onsemi Stock a Good Investment? Bull Case, Bear Case, and Outlook

Whether onsemi stock represents an attractive investment depends primarily on three variables: the duration of the semiconductor inventory correction, the pace of gross margin recovery, and the stability of China revenue. The bull and bear cases for ON diverge on these specific factors, not on the underlying SiC demand story, which both sides broadly accept as structurally intact.

Bull Case for ON Stock

1. SiC structural demand: Analyst estimates place onsemi semiconductor content per BEV at approximately $400–$800, compared to roughly $50–$100 in a traditional ICE vehicle. As global EV production scales, this content advantage translates into long-term revenue growth that is independent of near-term inventory cycles.
2. Gross margin recovery pathway: onsemi's gross margins expanded from 33% to roughly 47% through deliberate strategic choices, not cyclical luck. If the inventory correction resolves and SiC product mix continues to rise, the structural margin improvement should reassert itself, with management targeting [DATA REQUIRED] as the long-term range.
3. Design win pipeline and LTSAs: Multi-year long-term supply agreements with major automotive OEMs provide revenue visibility that extends beyond what current quarterly order rates suggest, reducing the risk that near-term weakness understates onsemi's medium-term earnings power.
4. FCF generation and buybacks: onsemi generates positive free cash flow even during the inventory correction, funding share repurchases that reduce diluted share count and mechanically support EPS. This contrasts with Wolfspeed, which requires external capital to fund its build phase.
5. Top-3 SiC supplier with vertical integration: onsemi's boule-to-device manufacturing control gives it cost and supply chain advantages over fabless SiC competitors, and the scale of its installed manufacturing capacity creates barriers to entry that emerging Chinese competitors have not yet replicated.
6. Valuation discount: At [DATA REQUIRED]x forward earnings, ON trades at a [DATA REQUIRED]% discount to the SOXX semiconductor ETF median P/E of [DATA REQUIRED]x, per FactSet data as of [DATE], implying a margin of safety if the recovery thesis plays out.

Bear Case for ON Stock

1. Inventory correction duration uncertain: The recovery timeline remains explicitly uncertain. Even management has not provided a specific normalization date, and analyst estimates range over multiple quarters. A prolonged correction would delay both revenue recovery and gross margin expansion.
2. China revenue concentration: Approximately [DATA REQUIRED]% of onsemi's revenue is derived from China-based customers per fiscal [DATA REQUIRED] disclosures. Chinese EV manufacturers are actively developing domestic SiC supply chains through SICC and BYD's internal semiconductor program, representing a structural displacement risk beyond cyclical destocking.
3. EV demand moderation in Western markets: Slower-than-expected BEV adoption in the U.S. and Europe in 2023 and 2024 reduced near-term demand signals for SiC power devices and caused onsemi's customers to revise production schedules downward. If adoption growth remains below consensus long-term forecasts, onsemi's content-per-vehicle opportunity may take longer to materialize.
4. Competitive margin pressure: STMicroelectronics is investing aggressively in SiC manufacturing capacity for European OEMs, and multiple Chinese manufacturers are entering the SiC market with state support, creating a more competitive pricing environment that could limit gross margin recovery even as volumes recover.
5. Gross margin compression persists: The inventory correction drove gross margins from the 47% peak back toward 40–45%. If fab utilization rates remain depressed for longer than expected, the fixed cost absorption problem continues to weigh on margins regardless of revenue trajectory.
6. Customer concentration risk: A small number of large OEM customers represent a disproportionate share of onsemi's revenue; if any of the largest customers changes platform decisions or accelerates domestic SiC sourcing, the revenue impact would be material.

Wall Street analysts hold a consensus [DATA REQUIRED] rating on ON stock with a median 12-month price target of $[DATA REQUIRED], per FactSet consensus as of [DATE]. Whether onsemi stock is a good investment depends on an investor's own assessment of the inventory correction timeline, their tolerance for China revenue risk, and their view on whether the gross margin expansion achieved between 2021 and 2023 reflects permanent structural change or partly cyclical conditions.

Investment Disclaimer: This analysis is for informational purposes only and does not constitute financial advice, investment advice, or a recommendation to buy, sell, or hold any security. Past performance is not indicative of future results. Investors should conduct their own due diligence and consult a qualified financial advisor before making investment decisions.

Frequently Asked Questions About onsemi (ON) Stock

What does onsemi do?

onsemi designs and manufactures intelligent power and sensing semiconductors for electric vehicles, automotive ADAS systems, and industrial automation applications. The company trades on NASDAQ as ON and operates three business segments: the Power Solutions Group (PSG), which produces SiC MOSFETs and IGBTs for EV powertrains; the Advanced Solutions Group (ASG), which covers mixed-signal and analog products; and the Intelligent Sensing Group (ISG), which makes image sensors for automotive cameras. onsemi is a top-3 global supplier of silicon carbide power devices.

What is the stock symbol for onsemi?

The ticker symbol is ON, listed on NASDAQ. onsemi is a member of the S&P 500 index. The former legal name was ON Semiconductor Corporation; the company rebranded to onsemi in 2022 but retained the ON ticker. When searching brokerage platforms, enter ON on NASDAQ to find onsemi stock.

Is onsemi a good investment?

Whether onsemi is a good investment depends on an investor's view of three specific factors: the duration of the 2022–2024 semiconductor inventory correction, the pace at which gross margins recover toward the previous peak of roughly 47%, and the stability of onsemi's China revenue, which represented approximately [DATA REQUIRED]% of total sales per fiscal [DATA REQUIRED] disclosures. The bull case rests on SiC structural demand in EVs and gross margin recovery; the bear case centers on inventory correction uncertainty, China risk, and EV adoption timing. Wall Street holds a consensus [DATA REQUIRED] rating, per FactSet as of [DATE]. This is not a recommendation; consult a qualified financial advisor before making investment decisions.

What is onsemi's price target?

The consensus 12-month analyst price target for onsemi (ON) stock is $[DATA REQUIRED], based on coverage from [DATA REQUIRED] Wall Street analysts, per FactSet consensus as of [DATE]. Targets range from a low of $[DATA REQUIRED] to a high of $[DATA REQUIRED]. The consensus target implies [DATA REQUIRED]% upside or downside from the current price of $[DATA REQUIRED]. Analyst price targets are forward-looking estimates and individual firm methodologies vary; the Wall Street Analyst Ratings section above provides firm-level detail.

Who are onsemi's main competitors?

onsemi's primary SiC competitors are STMicroelectronics (NYSE: STM) and Wolfspeed (NYSE: WOLF, formerly Cree). Broader power semiconductor competitors include Infineon Technologies, ROHM Semiconductor, and Renesas Electronics. Emerging Chinese SiC manufacturers, including SICC and BYD Semiconductor, represent a longer-term competitive risk specifically to onsemi's China revenue base. STM and onsemi are the most directly comparable publicly traded companies: both are profitable and diversified with large automotive SiC businesses. Wolfspeed is the only major pure-play SiC company but is currently unprofitable.

How is onsemi exposed to the electric vehicle market?

Automotive revenue represented approximately [DATA REQUIRED]% of onsemi's total revenue in fiscal [DATA REQUIRED], per the company's annual report. onsemi supplies SiC power devices to EV powertrains across four primary applications: the main traction inverter (the largest dollar content opportunity per vehicle, estimated at $150–$300 of SiC content), onboard chargers (OBC), DC-DC converters, and battery management systems (BMS). Analyst estimates place total onsemi semiconductor content per BEV at approximately $400–$800, compared to roughly $50–$100 per traditional ICE vehicle. Both battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) require high-power SiC inverters; mild hybrids do not.

What happened to onsemi stock recently?

ON stock has declined approximately [DATA REQUIRED]% from its all-time high of roughly $115 reached in late 2021, primarily due to the 2022–2024 semiconductor inventory correction. After the 2020–2021 chip shortage, automotive and industrial customers accumulated excess SiC inventory and reduced order rates through 2023 and 2024, causing onsemi's revenue to decline from peak levels and gross margins to compress from the 47% peak back toward 40–45%. EV demand moderation in Western markets provided a secondary headwind. China-based customers, who represent approximately [DATA REQUIRED]% of onsemi's revenue, also destocked through this period. The most recent quarterly result was the Q[DATA REQUIRED] [DATA REQUIRED] report released [DATA REQUIRED].

Does onsemi pay a dividend?

No. onsemi does not distribute a cash dividend. The company returns capital to shareholders through share repurchases rather than dividends, consistent with its positioning as a growth-oriented semiconductor company. The board has authorized a share repurchase program totaling $[DATA REQUIRED], of which $[DATA REQUIRED] remains available per the most recent 10-Q filing. The buyback program is funded from free cash flow (operating cash flow minus capital expenditures) and reduces diluted share count over time, mechanically supporting earnings per share growth.

What is onsemi's revenue?

onsemi's most recent full-year revenue was $[DATA REQUIRED] billion for fiscal [DATA REQUIRED], a [DATA REQUIRED]% change from $[DATA REQUIRED] billion in the prior fiscal year, per the company's annual report filed with the SEC. On a trailing twelve-month basis through the most recent quarter, revenue was $[DATA REQUIRED] billion. The semiconductor inventory correction drove the year-over-year change, reducing customer order rates across both automotive and industrial end markets. Revenue by segment (PSG, ASG, ISG) is disclosed in onsemi's quarterly earnings press releases and 10-Q filings.

How does onsemi compare to Wolfspeed?

onsemi and Wolfspeed both rank among the top-3 global SiC suppliers, but they differ materially on financial profile and business model. onsemi is profitable, generates positive free cash flow, and operates a diversified business across power semiconductors, analog products, and image sensors. Wolfspeed (formerly Cree) is a pure-play SiC company that has operated at a net loss while funding construction of its Mohawk Valley fab in New York, and carries substantial debt on its balance sheet. Wolfspeed's forward P/E is not applicable due to negative earnings; onsemi's forward P/E is [DATA REQUIRED]x per FactSet as of [DATE]. Both offer SiC market exposure; onsemi carries lower financial risk at the cost of diluted pure-play SiC exposure.

Has onsemi done a stock split?

onsemi has not conducted a recent stock split as of [DATE]. At current price levels, a stock split has not been publicly discussed by management and does not appear in any recent SEC filings or investor communications. This query likely reflects investor curiosity rather than an active corporate action. Verify current status at the onsemi Investor Relations earnings calendar{target="_blank" rel="noopener noreferrer

Disclaimer

This article is for informational purposes only and does not constitute financial advice, investment advice, or a recommendation to buy, sell, or hold any security. Past performance is not indicative of future results. All data referenced in this article was sourced from publicly available information and is believed to be accurate as of the date noted, but may not reflect the most current market conditions. Financial figures marked [DATA REQUIRED] must be verified and populated from primary sources (SEC filings, FactSet, Yahoo Finance) before publication. Investors should conduct their own due diligence and consult a qualified financial advisor before making any investment decisions.