ON
ON Semiconductor
Summary
What they do:
Designs and manufactures silicon carbide (SiC) power semiconductors, power management ICs, and analog/mixed-signal devices — the components that regulate voltage, convert power, and manage energy efficiency across automotive, industrial, and data center applications.
Why they matter:
SiC is the enabling material for high-efficiency power conversion in EVs and increasingly in AI data centers. ON Semi (onsemi) is the second-largest SiC supplier globally, and its expansion into AI data center power — where SiC devices improve PSU efficiency from ~92% (silicon) to ~96%+ — positions it at the intersection of two secular growth curves. The company's deliberate pivot away from $300M in non-core revenue signals a strategic bet on higher-margin, higher-growth end markets.
Recent performance:
FY2025 revenue $6.0B. Q4 revenue $1.53B, EPS $0.64 (beat by $0.02). AI data center revenue >$250M in 2025, growing high teens. Q1 2026 guided $1.44-1.54B. Stock ~$83, market cap ~$35B. Up ~150% from 52-week low of $33.20.
Our Verdict
SiC power semiconductor leader undergoing a deliberate margin-focused transformation — exiting $300M in non-core revenue to concentrate on automotive SiC and AI data center power, where efficiency requirements favor wide-bandgap materials, but the cyclical automotive exposure and SiC commoditization risk keep this as a "prove it" story at 12x forward P/E.
Structural trends
Structural
51
/ 100
Moat
5/10
SiC expansion
AI Exp.AI Exposure
Embedded~20% AI
Play Type
EmergingAI Growth
~18-22%
Rel. Value
76
COMPELLINGPriceLIVE
$72.05
+1.45%
Live via Yahoo Finance · refreshes every 5 min
Market Cap
$28.4B
P/E Ratio
248.4
P/S Ratio
4.7x
52W High
$73.76
52W Low
$32.85
52W Chg
119.3%
Beta
1.52
ON Semiconductor — rebranded as onsemi — is an integrated device manufacturer (IDM) that designs, fabricates, and sells power semiconductors. The company's strategic identity has shifted dramatically under CEO Hassane El-Khoury (appointed 2020): from a broad-line analog semiconductor supplier with thin margins to a focused power semiconductor company built around silicon carbide technology and intelligent power management.
The business operates across three end markets. Automotive is the largest at roughly 55-60% of revenue, driven by SiC MOSFETs for EV traction inverters, onboard chargers, and DC-DC converters. Industrial represents 25-30%, including power conversion for renewable energy, motor drives, and factory automation. Data center and cloud is the fastest-growing at 10-15% and climbing, where SiC rectifiers and power modules improve efficiency in server PSUs and 48V distribution systems.
The SiC portfolio is the crown jewel. Onsemi's EliteSiC platform spans 650V to 1700V MOSFETs and Schottky diodes, targeting the full power conversion chain. In January 2025, the company acquired Qorvo's SiC JFET technology portfolio (including United Silicon Carbide), adding cascode JFET architecture for AC-DC power conversion — directly addressing AI data center PSU efficiency needs. The acquisition strengthens onsemi's position in the critical first conversion stage inside server power supplies, where SiC can deliver 2-4% efficiency gains over silicon at the wattages AI servers demand.
Manufacturing is global: fabs in the US (including SiC expansion in Arizona), Europe, South Korea, and Asia. The company is investing heavily in SiC capacity expansion, with CHIPS Act support for domestic production. Onsemi employs approximately 33,000 people. FY2025 revenue was $6.0B with non-GAAP gross margin of 38.4%. The company generated over $1B in free cash flow.
The strategic pivot matters: onsemi is deliberately exiting $300M of non-core, lower-margin revenue in 2026. This will pressure the top line near-term but is designed to improve the margin profile and concentrate resources on automotive SiC and AI data center power — the two markets where wide-bandgap semiconductor content growth is steepest.
Supply Chain Dependencies
Upstream Suppliers
Downstream Customers
The Catch
Onsemi is a SiC power semiconductor company that is 55-60% exposed to automotive production cycles in a period where auto replenishment hasn't started, competing against Infineon and STMicroelectronics (both of which have larger R&D budgets and broader automotive product portfolios), while simultaneously executing a $300M non-core revenue exit that temporarily shrinks the top line. SiC technology is commoditizing — the material advantage that once justified premium pricing is eroding as every major power semiconductor company scales SiC production. The AI data center opportunity is real but still represents only ~4% of total revenue, and hyperscalers have multiple SiC and GaN suppliers to choose from. Wolfspeed's emergence from Chapter 11 adds a reinvigorated competitor with new financial backing. And the stock's recovery from $33 to $83 — up ~150% — means the easy money in the cyclical rebound trade has already been made.
If They Win
If onsemi's strategic transformation fully delivers — automotive SiC content growth doubles as 800V platforms proliferate, AI data center SiC scales from $250M to $1B+ as hyperscaler PSU upgrades adopt wide-bandgap semiconductors, and the non-core exit creates a permanently higher-margin business — then onsemi becomes the SiC power franchise for the electrification era: the company whose devices sit inside every EV drivetrain and every AI server power supply, converting power with 96%+ efficiency where silicon can only manage 92%. Revenue compounds to $8B+ by 2028, gross margins expand to 45%+ on favorable SiC mix, and the company generates $2B+ in annual free cash flow. At that point, onsemi isn't a cyclical semiconductor stock — it's a structural compounder in the power semiconductor chain, warranting a re-rating from ~12x to 20x+ forward earnings and a path to $60B+ market cap.
Others in Power Regulation for the Server
Not financial advice. All scores generated via AI algorithms using public data.