ON Semiconductor (ON) — Company Research
Last Updated: 14 July 2026
ON Semiconductor Corporation (onsemi) is a US power and sensing semiconductor company headquartered in Scottsdale, Arizona. Its chips manage electrical power and sense the physical world in cars, factories and — increasingly — AI data centres. The company is emerging from a bruising three-year downcycle: revenue has fallen from a 2022 peak of $8.33bn to $6.00bn in 2025, but Q1 2026 marked what management calls the turn, with demand strengthening through the quarter and the AI data-centre business growing more than 30% sequentially. On 25 June 2026 onsemi announced its largest-ever acquisition — a $7bn all-stock deal for Synaptics — and the market's verdict was brutal: the shares fell roughly 21% in the days that followed. This report sets out the facts.
1. Company Snapshot
| Field | Value |
|---|---|
| Company | ON Semiconductor Corporation (onsemi) |
| Ticker / Exchange | ON / Nasdaq |
| Headquarters | Scottsdale, Arizona, USA |
| Founded | 1999 (spun out of Motorola's Semiconductor Components Group) |
| CEO | Hassane El-Khoury (President and CEO since December 2020) |
| Employees | ~19,537 (31 December 2025, FY2025 10-K) |
| Sector | Semiconductors — intelligent power and sensing |
| Revenue (FY2025) | $5,995.4m (down 15.3% year-over-year) |
| Net income (FY2025, GAAP) | $121.0m (non-GAAP $966.4m) |
| Market cap | ~$37.4bn (July 2026) |
| Dividend | Nil — capital returned via share repurchases |
2. Bull vs Bear Case
Bull Case
- AI data centre is inflecting: onsemi's power-management content in AI server racks drove data-centre revenue up more than 30% sequentially in Q1 2026, and management says the company has moved beyond the cyclical trough with demand strengthening through the quarter.
- The trough is behind it: Q1 2026 revenue of $1,513.3m beat the guidance midpoint, gross margin expanded to 38.5% on manufacturing efficiency, and Q2 2026 guidance of $1,535–1,635m implies a return to sequential and year-over-year growth.
- Synaptics expands the opportunity: the $7bn all-stock acquisition adds edge-AI compute, human-machine interface and wireless connectivity, extending onsemi beyond power and sensing into intelligent systems and expanding its addressable market by $30bn to $243bn by 2030, with $200m of annual synergies targeted within 18 months of close.
- Free-cash-flow machine: FY2025 free cash flow was a record-margin $1,418.6m (24% of revenue) despite the downturn, and the company returned 100% of it to shareholders through buybacks — treasury stock has grown to $6.1bn at cost.
Bear Case
- Three straight years of decline: revenue has fallen from $8,326.2m (2022) to $5,995.4m (2025) — a 28% peak-to-trough contraction — as automotive and industrial customers burned inventory and EV demand disappointed.
- The market hated the Synaptics deal: the all-stock structure dilutes existing holders at a depressed share price, the stock fell about 21% in the days after the 25 June announcement, and law firm Pomerantz opened an investor investigation into the transaction.
- GAAP profitability collapsed: FY2025 GAAP EPS was just $0.29 versus $2.35 non-GAAP, the gap driven by $666.9m of restructuring and impairment charges plus $313.6m of restructuring-related inventory charges as the company cut ~2,400 jobs and rationalised fabs.
- Heavily shorted and cyclical: short interest is roughly 15% of the float — far above the peer average — reflecting scepticism about the pace of the automotive/industrial recovery and competitive pressure in silicon carbide from Chinese entrants.
3. Revenue Segments
onsemi reports three segments. Figures below are FY2025 (year ended 31 December 2025) from the Q4 2025 earnings release.
| Segment | % of revenue | What it is |
|---|---|---|
| PSG — Power Solutions Group | 46.8% ($2,805.1m) | Power discretes, MOSFETs, IGBTs and silicon carbide (SiC) devices that convert and manage electrical power in vehicles, industrial equipment, energy infrastructure and AI data centres. |
| AMG — Analog & Mixed-Signal Group | 37.7% ($2,261.9m) | Analog and mixed-signal ICs, power management and connectivity products spanning automotive, industrial and cloud/data-centre applications. |
| ISG — Intelligent Sensing Group | 15.5% ($928.4m) | Image sensors and depth/inertial sensing for machine vision, ADAS (advanced driver-assistance) cameras and industrial automation. |
4. Business Model
How the money is made: onsemi designs and manufactures semiconductors that sit between a power source and a load — converting, switching and conditioning electricity — plus image sensors that let machines see. Roughly half of revenue comes from automotive (EV traction inverters, on-board chargers, ADAS sensing), with the balance from industrial, energy infrastructure and a fast-growing AI data-centre power business. Chips are sold directly to OEMs and through distributors, with long qualification cycles that make design wins sticky for the life of a vehicle platform or server generation.
Unit economics: the company runs a hybrid "fab-liter" manufacturing model — it owns front-end fabs (including the East Fishkill, NY fab acquired from GlobalFoundries and SiC capacity in the Czech Republic, Korea and the US) but has been consolidating sites to lift utilisation. Gross margin peaked above 47% in 2022–23, troughed at 33.1% GAAP in FY2025 during the downturn, and recovered to 38.5% by Q1 2026. Fall-through on incremental volume is high once fixed fab costs are covered.
Moat: scale in power semiconductors (top-two globally in power discretes), a vertically integrated silicon-carbide supply chain from boule growth to modules, and deep automotive qualification barriers. The pending Synaptics acquisition would add edge-AI compute and connectivity IP, moving onsemi up the value stack from components toward intelligent sub-systems.
Capital allocation: no dividend; 100% of FY2025 free cash flow went to share repurchases ($1.4bn). The Synaptics deal is deliberately all-stock, preserving the balance sheet ($2.5bn cash and short-term investments against $3.0bn long-term debt at year-end 2025).
5. Financial Health
All figures from company earnings releases and SEC EDGAR XBRL filings (10-K). onsemi's fiscal year ends 31 December.
| Fiscal Year | Revenue ($m) | YoY % | GAAP EPS | Adjusted EPS | Dividend/share | Long-term debt (YE, $m) |
|---|---|---|---|---|---|---|
| 2021 | $6,739.8m | +28.3% | $2.27 | $2.95 | Nil | $2,913.9m |
| 2022 | $8,326.2m | +23.5% | $4.25 | $5.33 | Nil | $3,045.7m |
| 2023 | $8,253.0m | -0.9% | $4.89 | $5.16 | Nil | $2,542.6m |
| 2024 | $7,082.3m | -14.2% | $3.63 | $3.98 | Nil | $3,345.9m |
| 2025 | $5,995.4m | -15.3% | $0.29 | $2.35 | Nil | $2,980.5m |
FY2025 GAAP EPS of $0.29 is depressed by $666.9m of restructuring/asset-impairment charges and $313.6m of restructuring-related inventory charges; non-GAAP EPS was $2.35. FY2025 operating cash flow was $1,759.8m, capital expenditure $341.2m, free cash flow $1,418.6m and depreciation & amortisation $686.0m (all per the FY2025 cash flow statement).
| Quarter / Half | Revenue ($m) | Adjusted EPS | GAAP EPS |
|---|---|---|---|
| Q1 2026 (ended 3 Apr 2026) | $1,513.3m | $0.64 | $0.08 |
| Q4 2025 | $1,530.1m | $0.64 | $0.45 |
| Q3 2025 | $1,550.9m | $0.63 | $0.63 |
| Q2 2025 | $1,468.7m | $0.53 | $0.41 |
| Q1 2025 | $1,445.7m | $0.55 | $(1.15) |
| FY 2025 total | $5,995.4m | $2.35 | $0.29 |
Q1 2025's GAAP loss reflects the bulk of the 2025 restructuring and impairment programme. Q1 2026 GAAP EPS of $0.08 versus $0.64 non-GAAP includes further restructuring charges ($58.8m booked in Q4 2025 alone as the programme wound down) and deal-related items. Q1 2026 operating cash flow was $239.1m, capex $21.9m and free cash flow $217.2m, with $345.7m of buybacks in the quarter.
6. Valuation Metrics
Raw metrics, July 2026. Not opinions on whether the stock is cheap or expensive.
| Metric | Value |
|---|---|
| Market cap | ~$37.4bn (share price ~$96, 13 July 2026) |
| Trailing P/E (GAAP) | ~61x — trailing-twelve-month GAAP EPS of ~$1.57 (Q2 2025 to Q1 2026) is heavily distorted by restructuring and impairment charges; on FY2025 non-GAAP EPS of $2.35 the multiple is ~41x |
| P/E (forward) | n/a — company guides one quarter ahead only (Q2 2026 non-GAAP EPS guidance $0.65–$0.77, which annualises to roughly $2.80–$3.10) |
| P/S (TTM) | ~6.2x (market cap ~$37.4bn / trailing-twelve-month revenue ~$6.06bn) |
| Enterprise value | ~$37.8bn (market cap ~$37.4bn + long-term debt $2,980.5m − cash and short-term investments $2,547.6m per 31 Dec 2025 balance sheet) |
| EV/EBITDA (TTM) | ~21x on an adjusted basis (EV ~$37.8bn / adjusted EBITDA ~$1.81bn = FY2025 non-GAAP operating income $1,119.5m + D&A $686.0m); GAAP EBITDA of ~$0.77bn (operating income $84.2m + D&A $686.0m) is distorted by ~$981m of one-off restructuring/impairment charges and implies ~49x |
| P/FCF | ~26x (market cap ~$37.4bn / FY2025 free cash flow $1,418.6m; FCF = operating cash flow $1,759.8m − capex $341.2m per FY2025 cash flow statement) |
| 52-week high | $134.92 (3 June 2026) |
| 52-week low | $44.56 (21 November 2025) |
| Short interest (% of float) | ~15.3% (MarketBeat, latest reported period) |
| Days to cover | ~4.4 (on ~9.0m average daily volume) |
7. What Are They Building
Three build-outs matter. First, AI data-centre power: onsemi is scaling its power-stage and power-management portfolio for AI server racks, where per-rack power density is rising sharply; this business grew more than 30% sequentially in Q1 2026 and is the company's fastest-growing end market. Second, vertical GaN and the Treo analog/mixed-signal platform: a new 65nm-class analog platform and vertical gallium-nitride devices aimed at higher-voltage, higher-efficiency power conversion — the next technology legs beyond silicon and silicon carbide. Third, and largest, the Synaptics acquisition (announced 25 June 2026): an all-stock deal at a fixed 1.350 exchange ratio valuing Synaptics at roughly $7bn enterprise value. Synaptics brings edge-AI compute, human-machine interface and wireless connectivity (Wi-Fi/Bluetooth for IoT). Management frames the combination as "physical AI" — pairing onsemi's power and sensing with Synaptics' compute and connectivity to sell intelligent sub-systems rather than discrete parts. The combined company would have had roughly $7.8bn of 2026 revenue; $200m of annual synergies are targeted within 18 months of close, expected mid-2027 subject to Synaptics shareholder and regulatory approvals. You can track the chart on our Live Charts page.
8. Competitive Landscape
onsemi competes in power semiconductors and image sensing against larger European and US analog/power houses. Market caps as retrieved July 2026.
| Peer | Market cap (Jul 2026) | Key 2025 metric |
|---|---|---|
| Infineon Technologies (IFX) | ~$108.3bn | FY2025 (ended 30 Sep 2025) revenue ~€14.7bn — the European power-semiconductor leader |
| Texas Instruments (TXN) | ~$275.9bn (24 Jun 2026) | 2025 revenue grew ~13% (quarterly run-rate $4.1–4.7bn) — dominant analog scale player |
| NXP Semiconductors (NXPI) | ~$75.3bn (Jun 2026) | FY2025 revenue $12.27bn, down 3% — closest US automotive-semi comparable |
| STMicroelectronics (STM) | ~$64.1bn (9 Jul 2026) | FY2025 net revenues $11.8bn, down 11.1% on automotive weakness — chief SiC rival |
Within silicon carbide, onsemi's vertically integrated supply chain competes with STMicroelectronics and Infineon at the top end, while Chinese entrants pressure pricing at the commodity end. In image sensing, Sony dominates consumer, but onsemi leads automotive ADAS cameras.
9. Leadership & Insider Activity
Hassane El-Khoury has been President and CEO since December 2020, having led the pivot to intelligent power and sensing; Thad Trent is EVP and CFO. The FY2025 restructuring cut roughly 2,400 jobs, and the leadership team is now integrating the Synaptics transaction announced in June 2026.
| Name | Date | Type | Shares | Price | Value | Plan Type |
|---|---|---|---|---|---|---|
| Hassane El-Khoury (President & CEO) | 12 Feb 2026 | Sale (open market) | 20,000 | ~$73.02–$73.56 | ~$1.46m | Not stated (Form 4) |
| Hassane El-Khoury (President & CEO) | 10 Feb 2026 | Shares withheld for tax on PSU vesting | 20,762 | $67.38 | ~$1.40m | Tax withholding |
| Hassane El-Khoury (President & CEO) | 5 Feb 2026 | PSU vesting (acquisition) | 112,772 | — | — | Equity award |
Beyond routine February 2026 equity-award vesting and the CEO's ~$1.5m open-market sale, searches found no material insider buying in 2026. No director or officer purchases were identified following the Synaptics announcement.
10. Risks
- M&A execution (Operational): the all-stock Synaptics acquisition dilutes holders at a depressed price, integration spans very different product cultures (consumer connectivity vs automotive power), and an investor investigation by Pomerantz LLP followed the announcement. Deal close is not expected until mid-2027, an unusually long window.
- Cyclical demand (Macro): revenue has declined for three consecutive years; the recovery visible in Q1 2026 could stall if automotive production or industrial capex weakens again.
- Automotive concentration (Operational): roughly half of revenue is automotive; EV build-rate swings and OEM inventory corrections hit onsemi harder than diversified analog peers.
- Silicon-carbide competition (Competitive): STMicroelectronics and Infineon contest the high end while subsidised Chinese capacity pressures SiC pricing; onsemi's SiC investments could earn sub-par returns if pricing erodes.
- Restructuring overhang (Financial): $981m of restructuring/impairment charges in FY2025 (including inventory charges) shows how quickly fixed-cost leverage cuts both ways; further site consolidation could bring more charges.
- Trade and export controls (Regulatory): a global fab and test footprint across the US, Czech Republic, Korea, Philippines and China exposes the company to tariffs and export-control shifts.
11. Recent Developments
- 25 Jun 2026 — $7bn all-stock Synaptics acquisition announced. Fixed exchange ratio of 1.350 onsemi shares per Synaptics share, a ~19% premium on 10-day VWAPs; expands addressable market by $30bn to $243bn by 2030 with $200m annual synergies targeted within 18 months of close (expected mid-2027). onsemi shares fell ~6% after hours and roughly 21% over the following days; Pomerantz LLP opened an investor investigation into the deal.
- 3 Jun 2026 — Shares touched a 52-week high of $134.92 amid enthusiasm for the AI data-centre power business, before the Synaptics announcement reset the price to the mid-$90s.
- 4 May 2026 — Q1 2026 results beat guidance midpoint. Revenue $1,513.3m, non-GAAP EPS $0.64 (vs $0.55 a year earlier), GAAP EPS $0.08, gross margin 38.5%; AI data-centre revenue up more than 30% sequentially; free cash flow $217.2m with $345.7m of buybacks. Q2 2026 guidance: revenue $1,535–1,635m, non-GAAP EPS $0.65–$0.77.
- 9 Feb 2026 — FY2025 results: trough year confirmed. Revenue $5,995.4m (−15.3%), GAAP EPS $0.29, non-GAAP EPS $2.35, record 24% free-cash-flow margin ($1.4bn), 100% of FCF returned via buybacks.
12. Key Dates
Check our Economic Calendar for macro events that move semiconductor stocks, and discuss this name on the ChartsView Forum.
- 3 Aug 2026 — Q2 2026 results (expected date; guidance is revenue $1,535–1,635m and non-GAAP EPS $0.65–$0.77)
- Expected Nov 2026 — Q3 2026 results
- TBC — Synaptics shareholder vote on the all-stock merger
- Expected mid-2027 — Targeted close of the Synaptics acquisition, subject to regulatory approvals
Disclaimer: This research is produced by ChartsView for educational and informational purposes only. It does not constitute financial advice or a recommendation to buy or sell any security. All information is sourced from publicly available company filings, press releases, and official data. ChartsView does not use analyst opinions or third-party ratings. Always conduct your own due diligence and consider your personal financial situation before making investment decisions. Past performance is not indicative of future results.
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13. Thesis Verdict
The central thesis. onsemi designs and manufactures power and sensing semiconductors — MOSFETs, silicon carbide, analog/mixed-signal ICs and image sensors — sold into automotive, industrial and, increasingly, AI data-centre power, across its PSG (46.8%), AMG (37.7%) and ISG (15.5%) segments. FY2025 was the trough of a three-year downcycle: revenue fell 15.3% to $5,995.4m with GAAP EPS of just $0.29 ($2.35 non-GAAP) after ~$981m of restructuring charges, yet free-cash-flow margin hit a record 24% and 100% of FCF went to buybacks. Q1 2026 beat the guidance midpoint at $1,513.3m with AI data-centre revenue up more than 30% sequentially, and Q2 2026 guidance of $1,535–1,635m implies a return to growth. The near-term story is the AI data-centre power ramp plus the $7bn all-stock Synaptics acquisition (announced 25 Jun 2026, closing mid-2027), which expands the addressable market by $30bn but knocked roughly 21% off the shares.
What would confirm or break it. Confirmation would be Q2 2026 results (expected 3 Aug 2026) landing within or above guidance, continued sequential AI data-centre growth, and clean progress through Synaptics shareholder and regulatory milestones. The thesis breaks if the automotive/industrial recovery stalls into a fourth down-year, if Synaptics integration or the investor investigation escalates the deal discount, or if Chinese silicon-carbide pricing pressure erodes the margin recovery — the M&A-execution and cyclical-demand risks flagged in Section 10.
Watchpoints
- ConfirmsQ2 2026 earnings (expected 3 Aug 2026) (20 days) landing in line with or above management guidance.
- ConfirmsEvidence supporting the "AI data centre is inflecting:" thesis continuing to build across subsequent filings.
- InvalidatesMaterialisation of the "M&A execution (Operational):" risk, or any disclosure that fundamentally alters the capital-return or growth profile stated by management.
Diagnostic grid
Generated by ChartsView research tooling. Thesis strength measures how well the evidence in this report supports the company's stated thesis — it is NOT a buy/sell rating or price target. ChartsView is not authorised by the FCA to provide regulated investment advice. Generated 14 Jul 2026.