The semiconductor industry remains a critical driver of technological innovation and economic growth in 2026. ON Semiconductor Corporation and SkyWater Technology, Inc. both operate within this dynamic sector, yet they differ significantly in scale, market approach, and innovation focus. By comparing these two companies, I aim to uncover which presents a more compelling investment opportunity. Join me as we explore their strengths and risks to determine the best fit for your portfolio.
Table of contents
Companies Overview
I will begin the comparison between ON Semiconductor Corporation and SkyWater Technology, Inc. by providing an overview of these two companies and their main differences.
ON Semiconductor Overview
ON Semiconductor Corporation provides intelligent sensing and power solutions worldwide, focusing on enabling electrification in automotive and sustainable energy markets. Its product portfolio includes analog, discrete, module, and integrated semiconductors used for power switching, signal conditioning, and voltage regulation. The company operates through three main segments and serves a broad range of end-markets with advanced semiconductor technologies.
SkyWater Technology Overview
SkyWater Technology, Inc. specializes in semiconductor development and manufacturing services, offering engineering and process development support to co-create customer technologies. It manufactures silicon-based analog, mixed-signal, power discrete, microelectromechanical systems, and rad-hard integrated circuits. SkyWater serves diverse industries including aerospace, automotive, bio-health, and industrial IoT, emphasizing collaborative technology development.
Key similarities and differences
Both ON Semiconductor and SkyWater operate in the semiconductor industry, providing analog and power semiconductor solutions. ON is a large, diversified company with 26,400 employees and a strong presence in automotive electrification and sustainable energy, while SkyWater is smaller with 702 employees, focusing primarily on semiconductor manufacturing services and technology co-creation for specialized markets. Their business models differ in scale and market approach, with ON offering broad product lines and SkyWater emphasizing customer collaboration and niche applications.
Income Statement Comparison
The table below presents a side-by-side comparison of key income statement metrics for ON Semiconductor Corporation and SkyWater Technology, Inc. for the fiscal year 2024.
| Metric | ON Semiconductor Corporation | SkyWater Technology, Inc. |
|---|---|---|
| Market Cap | 24.65B | 1.54B |
| Revenue | 7.08B | 342M |
| EBITDA | 2.54B | 25.3M |
| EBIT | 1.90B | 6.56M |
| Net Income | 1.57B | -6.79M |
| EPS | 3.68 | -0.14 |
| Fiscal Year | 2024 | 2024 |
Income Statement Interpretations
ON Semiconductor Corporation
ON Semiconductor showed a strong overall growth trend from 2020 to 2024, with revenue up 34.8% and net income surging 571.6%. Margins remained favorable, with a gross margin of 45.4% and net margin of 22.2%. However, in 2024, revenue declined by 14.2% and net income dropped 28%, reflecting a slowdown despite maintaining solid profitability ratios.
SkyWater Technology, Inc.
SkyWater experienced robust revenue growth of 143.7% and net income increased by 67.1% over the 2020-2024 period. The gross margin held steady at 20.3%, while the net margin was negative at -2.0%, though improving in 2024. The latest year saw a 19.4% revenue rise and a significant net margin improvement, signaling operational progress despite ongoing losses.
Which one has the stronger fundamentals?
ON Semiconductor benefits from higher absolute revenues, larger net profits, and consistently strong margins, though it faced a recent revenue and earnings decline. SkyWater, smaller and less profitable, shows rapid growth and margin improvement but remains unprofitable. ON’s scale and profitability contrast with SkyWater’s growth trajectory and loss reduction, providing different fundamental strengths for investors to consider.
Financial Ratios Comparison
This table presents the most recent key financial ratios for ON Semiconductor Corporation and SkyWater Technology, Inc. based on their 2024 fiscal year-end data.
| Ratios | ON Semiconductor Corporation | SkyWater Technology, Inc. |
|---|---|---|
| ROE | 17.9% | -11.8% |
| ROIC | 11.9% | 3.4% |
| P/E | 17.1 | -100.3 |
| P/B | 3.06 | 11.82 |
| Current Ratio | 5.06 | 0.86 |
| Quick Ratio | 3.38 | 0.76 |
| D/E (Debt-to-Equity) | 0.38 | 1.33 |
| Debt-to-Assets | 23.9% | 24.5% |
| Interest Coverage | 28.4 | 0.74 |
| Asset Turnover | 0.50 | 1.09 |
| Fixed Asset Turnover | 1.61 | 2.07 |
| Payout ratio | 0 | 0 |
| Dividend yield | 0% | 0% |
Interpretation of the Ratios
ON Semiconductor Corporation
ON Semiconductor displays a generally favorable profile with strong net margin at 22.21%, ROE at 17.88%, and ROIC at 11.88%, indicating efficient profitability and capital use. However, some ratios like WACC and PB are unfavorable, and the very high current ratio at 5.06 may suggest excessive liquidity. The company does not pay dividends, likely reflecting a reinvestment strategy focused on growth and innovation.
SkyWater Technology, Inc.
SkyWater Technology exhibits weak financial ratios, with negative net margin (-1.98%) and ROE (-11.79%), signaling operational challenges. Most leverage and liquidity ratios are unfavorable, including a low current ratio of 0.86 and high debt-to-equity of 1.33. The firm does not pay dividends, consistent with its negative earnings and probable emphasis on R&D and expansion activities.
Which one has the best ratios?
ON Semiconductor holds the advantage with a balanced set of favorable profitability and coverage ratios, despite some liquidity concerns. Conversely, SkyWater Technology faces significant financial weaknesses and negative returns, reflected in its mostly unfavorable ratio profile. ON’s ratios indicate a more stable financial footing compared to SkyWater’s ongoing challenges.
Strategic Positioning
This section compares the strategic positioning of ON Semiconductor Corporation and SkyWater Technology, Inc., focusing on market position, key segments, and exposure to technological disruption:
ON Semiconductor Corporation
- Large market cap of $24.7B with diversified semiconductor products; faces moderate competitive pressure in global markets.
- Operates three segments: Power Solutions, Analog Solutions, Intelligent Sensing, driving revenue across automotive and industrial sectors.
- Engages in advanced analog, mixed-signal, and semiconductor design with some foundry services, indicating moderate exposure to technology shifts.
SkyWater Technology, Inc.
- Smaller market cap of $1.5B, serving niche semiconductor manufacturing; likely faces higher competitive volatility.
- Focuses on semiconductor development and manufacturing services including wafer and advanced technology services for varied industries.
- Provides engineering and process development with wafer manufacturing, exposed to evolving semiconductor fabrication technologies.
ON Semiconductor Corporation vs SkyWater Technology, Inc. Positioning
ON Semiconductor has a diversified segment approach targeting automotive and power solutions markets, enabling multiple revenue streams. SkyWater concentrates on semiconductor manufacturing services with a narrower product focus, potentially limiting diversification but allowing specialized expertise.
Which has the best competitive advantage?
ON Semiconductor shows a slightly favorable moat with growing ROIC and increasing profitability, indicating improving value creation. SkyWater’s moat is slightly unfavorable despite growing ROIC, reflecting value destruction and higher risk in competitive advantage sustainability.
Stock Comparison
The past year revealed contrasting stock price trajectories for ON Semiconductor Corporation and SkyWater Technology, Inc., with significant variations in growth rates and trading dynamics shaping their market behavior.
Trend Analysis
ON Semiconductor Corporation experienced a bearish trend over the past 12 months, with a -20.88% price change and accelerating decline despite recent short-term gains of 20.37%. Volatility measured by standard deviation was relatively high at 11.97.
SkyWater Technology, Inc. showed a strong bullish trend over the same period, surging 236.8% with accelerating momentum and moderate volatility of 4.41. Recent performance remained positive, gaining 83.13%.
Comparing both stocks, SkyWater Technology delivered the highest market performance with a substantial price increase, outpacing ON Semiconductor’s decline and recent rebound.
Target Prices
The target price consensus for ON Semiconductor Corporation and SkyWater Technology, Inc. reflects cautious optimism from analysts.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| ON Semiconductor Corporation | 64 | 51 | 58.33 |
| SkyWater Technology, Inc. | 25 | 25 | 25 |
Analysts expect ON Semiconductor’s price to hover slightly below its current $60.28, while SkyWater Technology’s consensus target is notably below its current $32.03, signaling potential downside pressure.
Analyst Opinions Comparison
This section compares analysts’ ratings and financial scores for ON Semiconductor Corporation (ON) and SkyWater Technology, Inc. (SKYT):
Rating Comparison
ON Rating
- Rating: B- indicating a very favorable overall status.
- Discounted Cash Flow Score: Moderate at 3, suggesting fair valuation based on cash flows.
- ROE Score: Moderate at 2, showing average efficiency in generating profit from equity.
- ROA Score: Moderate at 3, indicating average asset utilization for earnings.
- Debt To Equity Score: Moderate at 2, suggesting balanced financial risk from debt levels.
- Overall Score: Moderate at 2, representing an average overall financial standing.
SKYT Rating
- Rating: B+ indicating a very favorable overall status.
- Discounted Cash Flow Score: Very unfavorable at 1, indicating concerns about valuation.
- ROE Score: Very favorable at 5, reflecting strong profit generation from shareholders’ equity.
- ROA Score: Very favorable at 5, signaling excellent use of assets to generate earnings.
- Debt To Equity Score: Very unfavorable at 1, implying higher financial risk due to debt reliance.
- Overall Score: Moderate at 3, indicating a slightly better overall financial position.
Which one is the best rated?
Based solely on the provided data, SKYT holds a higher overall rating (B+) and stronger ROE and ROA scores, but it has a very unfavorable discounted cash flow and debt-to-equity profile. ON exhibits moderate scores across most categories with fewer extremes.
Scores Comparison
The comparison of ON Semiconductor and SkyWater Technology scores is as follows:
ON Scores
- Altman Z-Score: 4.84, indicating a safe zone status.
- Piotroski Score: 6, showing average financial strength.
SKYT Scores
- Altman Z-Score: 2.20, indicating a grey zone status.
- Piotroski Score: 5, showing average financial strength.
Which company has the best scores?
ON Semiconductor has a higher Altman Z-Score in the safe zone compared to SkyWater’s grey zone score, while both have average Piotroski Scores. ON displays stronger financial stability overall.
Grades Comparison
Here is a comparison of recent grades issued by reputable grading companies for the two companies:
ON Semiconductor Corporation Grades
This table summarizes recent grades and recommendations from established grading firms for ON Semiconductor Corporation:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Piper Sandler | Maintain | Overweight | 2026-01-07 |
| Truist Securities | Maintain | Hold | 2025-12-19 |
| Morgan Stanley | Maintain | Equal Weight | 2025-11-24 |
| Truist Securities | Maintain | Hold | 2025-11-04 |
| Baird | Maintain | Neutral | 2025-11-04 |
| Rosenblatt | Maintain | Neutral | 2025-11-04 |
| Morgan Stanley | Maintain | Equal Weight | 2025-11-04 |
| TD Cowen | Maintain | Buy | 2025-11-04 |
| UBS | Maintain | Neutral | 2025-10-27 |
| B of A Securities | Maintain | Neutral | 2025-09-05 |
Overall, grades for ON Semiconductor display a mixed but generally neutral to moderately positive outlook, with a consensus rating of “Buy.”
SkyWater Technology, Inc. Grades
This table details recent grades and recommendations from reputable grading firms for SkyWater Technology, Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Needham | Maintain | Buy | 2025-11-06 |
| Piper Sandler | Maintain | Overweight | 2025-11-06 |
| TD Cowen | Maintain | Buy | 2025-11-06 |
| Needham | Maintain | Buy | 2025-08-07 |
| Needham | Maintain | Buy | 2025-05-08 |
| Needham | Maintain | Buy | 2025-02-27 |
| Needham | Maintain | Buy | 2024-11-11 |
| Piper Sandler | Maintain | Overweight | 2024-10-25 |
| Piper Sandler | Maintain | Overweight | 2024-08-08 |
| Needham | Maintain | Buy | 2024-05-09 |
The grades for SkyWater Technology are consistently positive, with all ratings indicating “Buy” or “Overweight,” and the consensus rating also at “Buy.”
Which company has the best grades?
SkyWater Technology has received consistently stronger grades, predominantly “Buy” and “Overweight,” compared to ON Semiconductor’s more mixed neutral and hold ratings. This suggests SkyWater is viewed more favorably by analysts, which could impact investor confidence and portfolio allocation decisions.
Strengths and Weaknesses
Below is a comparative summary of the key strengths and weaknesses for ON Semiconductor Corporation and SkyWater Technology, Inc. based on their latest financial and operational data.
| Criterion | ON Semiconductor Corporation (ON) | SkyWater Technology, Inc. (SKYT) |
|---|---|---|
| Diversification | Broad product segments including Power Solutions (3.35B), Analog Solutions (2.61B), Intelligent Sensing (1.13B) | Concentrated mostly in Advanced Technology Services and Wafer Services with 2024 total revenue under 160M USD |
| Profitability | Strong net margin at 22.21%, ROIC 11.88%, ROE 17.88% (favorable) | Negative net margin (-1.98%), ROIC 3.4%, ROE -11.79% (unfavorable) |
| Innovation | Consistent growth in ROIC (+156% trend), signaling improving capital efficiency | ROIC improving (+171% trend) but still below cost of capital, indicating ongoing value destruction |
| Global presence | Established global footprint with diversified end markets and solid asset turnover (0.5) | Smaller scale, less diversified, limited asset turnover (1.09) but struggling with liquidity and leverage ratios |
| Market Share | Large presence in multiple semiconductor segments, consistent revenue growth | Smaller niche player with limited market share and financial challenges |
Key takeaways: ON Semiconductor demonstrates solid profitability, diversification, and improving efficiency, making it a relatively stable investment. In contrast, SkyWater faces profitability and financial stability hurdles despite ROIC improvements, indicating higher risk for investors. Caution and risk management are advised when considering SkyWater.
Risk Analysis
Below is a comparison of key risks facing ON Semiconductor Corporation (ON) and SkyWater Technology, Inc. (SKYT) as of 2024:
| Metric | ON Semiconductor Corporation (ON) | SkyWater Technology, Inc. (SKYT) |
|---|---|---|
| Market Risk | Beta 1.54, moderate volatility in semiconductor industry | Beta 3.49, very high volatility, smaller market cap and niche exposure |
| Debt Level | Low debt-to-equity 0.38, favorable leverage | High debt-to-equity 1.33, unfavorable, higher financial risk |
| Regulatory Risk | Moderate, typical for US semiconductor sector | Elevated due to defense and aerospace customers, complex compliance |
| Operational Risk | Diversified segments, strong operational metrics | Smaller scale, less diversification, operational efficiency challenges |
| Environmental Risk | Moderate, industry pressure on sustainability and energy use | Moderate, smaller footprint but increasing environmental scrutiny |
| Geopolitical Risk | Exposure to global supply chains and trade tensions | Higher risk from defense contracts and export controls |
The most likely and impactful risks arise from market volatility and financial leverage. SkyWater’s higher beta and significant debt increase its vulnerability to market swings and interest costs. ON Semiconductor shows stronger financial health and operational scale, mitigating some risks but still faces sector regulatory and geopolitical challenges linked to global trade dynamics. Investors should weigh SkyWater’s growth potential against its elevated financial and market risks.
Which Stock to Choose?
ON Semiconductor Corporation has shown a favorable income statement overall despite a recent revenue decline of -14.19% in 2024. Its profitability metrics remain strong with a 22.21% net margin and 17.88% ROE. The company maintains low debt levels with net debt to EBITDA at 0.27 and a solid interest coverage of 30.49, supported by a “slightly favorable” global ratios opinion and a very favorable B- rating.
SkyWater Technology, Inc. exhibits positive income growth trends with a 19.39% revenue increase in 2024 and mostly favorable income statement growth metrics. However, its profitability is weak, with a negative net margin of -1.98% and a negative ROE of -11.79%. The company carries higher leverage, with a debt-to-equity ratio of 1.33 and a low interest coverage of 0.74, reflected in an unfavorable global ratios evaluation despite a very favorable B+ rating.
For investors prioritizing income stability and solid profitability, ON Semiconductor’s favorable income quality and moderate debt profile might appear more suitable. Conversely, those focused on growth potential and willing to tolerate higher risk could find SkyWater’s accelerating revenue and improving income growth trends more appealing, despite current profitability challenges.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of ON Semiconductor Corporation and SkyWater Technology, Inc. to enhance your investment decisions:
