ON Semiconductor Corporation plays a pivotal role in electrifying the automotive landscape, enabling innovations that redefine how we interact with technology daily. With a strong focus on intelligent sensing and power solutions, ON leads the semiconductor industry through its cutting-edge products, enhancing everything from electric vehicles to renewable energy systems. As I analyze the current market trends and the company’s fundamentals, I will explore whether ON’s growth potential and market valuation still align with its robust industry reputation.
Table of contents
Company Description
ON Semiconductor Corporation, founded in 1992 and headquartered in Scottsdale, Arizona, is a key player in the semiconductor industry, specializing in intelligent sensing and power solutions. With a market capitalization of approximately $22.39B, ON operates primarily in North America, Europe, and Asia, offering a diverse range of products across three main segments: Power Solutions, Advanced Solutions, and Intelligent Sensing. The company develops a variety of semiconductor products, including analog, discrete, and integrated solutions, to support applications in automotive electrification, fast-charging systems, and renewable energy. As a leader in innovation, ON Semiconductor is instrumental in shaping the industry’s future towards sustainable energy and advanced automotive technologies.
Fundamental Analysis
In this section, I will analyze ON Semiconductor Corporation’s income statement, financial ratios, and dividend payout policy to provide insights into its financial health.
Income Statement
Below is the income statement for ON Semiconductor Corporation, highlighting key financial figures over the last five fiscal years.
| Item | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Revenue | 5.26B | 6.74B | 8.33B | 8.25B | 7.08B |
| Cost of Revenue | 3.54B | 4.03B | 4.25B | 4.37B | 3.87B |
| Operating Expenses | 1.37B | 1.43B | 1.72B | 1.34B | 1.45B |
| Gross Profit | 1.72B | 2.71B | 4.08B | 3.88B | 3.22B |
| EBITDA | 970M | 1.28B | 3.01B | 3.22B | 2.54B |
| EBIT | 345M | 1.29B | 2.46B | 2.61B | 1.90B |
| Interest Expense | 168M | 130M | 95M | 75M | 62M |
| Net Income | 234M | 1.01B | 1.90B | 2.18B | 1.57B |
| EPS | 0.57 | 2.37 | 4.39 | 5.07 | 3.68 |
| Filing Date | N/A | 2022-02-14 | 2023-02-06 | 2024-02-05 | 2025-02-10 |
Interpretation of Income Statement
Over the past five years, ON Semiconductor has experienced fluctuating revenue, peaking in 2022 at 8.33B before declining to 7.08B in 2024. This volatility has significantly impacted net income, which also saw a peak in 2023 at 2.18B but fell to 1.57B in the most recent year. While gross profit margins have remained relatively stable, the decrease in revenue suggests potential challenges in maintaining market share or pricing power. The decline in EBITDA from 3.22B in 2023 to 2.54B in 2024 highlights the need for ON Semiconductor to reassess its operational efficiencies and cost management strategies to sustain profitability.
Financial Ratios
Below is the table of financial ratios for ON Semiconductor Corporation over the past five years.
| Ratios | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Net Margin | 4.46% | 14.98% | 22.85% | 26.46% | 22.21% |
| ROE | 6.62% | 22.02% | 30.74% | 28.06% | 17.88% |
| ROIC | 6.21% | 13.64% | 18.87% | 18.50% | 11.88% |
| P/E | 57.40 | 28.64 | 14.20 | 16.47 | 17.13 |
| P/B | 3.80 | 6.31 | 4.37 | 4.62 | 3.06 |
| Current Ratio | 1.89 | 2.45 | 2.78 | 2.71 | 5.06 |
| Quick Ratio | 1.15 | 1.56 | 2.00 | 1.74 | 3.38 |
| D/E | 0.99 | 0.68 | 0.52 | 0.43 | 0.38 |
| Debt-to-Assets | 40.28% | 32.18% | 26.97% | 25.42% | 23.90% |
| Interest Coverage | 2.07 | 9.87 | 24.87 | 33.94 | 28.37 |
| Asset Turnover | 0.61 | 0.70 | 0.70 | 0.62 | 0.50 |
| Fixed Asset Turnover | 2.09 | 2.65 | 2.38 | 1.86 | 1.61 |
| Dividend Yield | 0 | 0 | 0 | 0 | 0 |
Interpretation of Financial Ratios
Analyzing ON Semiconductor Corporation’s financial ratios for FY 2024 reveals a mixed picture of financial health. The liquidity ratios are robust, with a current ratio of 5.06 and a quick ratio of 3.38, indicating strong short-term financial stability. However, the solvency ratio at 0.42 suggests some reliance on debt, with a debt-to-equity ratio of 0.38, which is manageable but warrants monitoring. Profitability ratios are solid, with a net profit margin of 22.21% and return on equity at 17.88%, demonstrating effective cost management. Efficiency ratios like asset turnover at 0.50 indicate room for improvement in utilizing assets. Overall, while the company shows strengths in liquidity and profitability, the reliance on debt and moderate efficiency ratios may pose future risks.
Evolution of Financial Ratios
Over the past five years, ON Semiconductor Corporation has shown considerable improvement in liquidity and profitability ratios. The current ratio increased from 1.89 in 2020 to 5.06 in 2024, reflecting significant strengthening in short-term financial health. Meanwhile, net profit margins have also improved from 4.46% in 2020 to 22.21% in 2024, underscoring enhanced operational efficiency.
Distribution Policy
ON Semiconductor Corporation does not pay dividends, opting instead for a reinvestment strategy to fuel growth and innovation. This approach is typical for companies in high-growth phases, where capital is prioritized for research, development, and acquisitions. Despite the absence of dividends, ON engages in share buybacks, which can enhance shareholder value by reducing the number of outstanding shares. Overall, this strategy appears to support sustainable long-term value creation for shareholders, aligning with the company’s growth objectives.
Sector Analysis
ON Semiconductor Corporation operates in the semiconductor industry, focusing on intelligent sensing and power solutions. Key competitors include Texas Instruments and NXP Semiconductors, while its advantages lie in innovative power technologies and diverse product offerings.
Strategic Positioning
ON Semiconductor Corporation currently holds a significant market share in the semiconductor industry, particularly in intelligent sensing and power solutions. With a market cap of approximately $22.39B, the company faces competitive pressure from both established players and emerging startups focusing on innovative technologies. The ongoing technological disruption in electrification and renewable energy sectors is reshaping market dynamics, and ON’s advancements in automotive electrification and fast-charging systems position it well to capitalize on these trends. Nevertheless, investors should remain cautious due to the volatility inherent in the semiconductor market and potential economic fluctuations.
Revenue by Segment
The following pie chart illustrates the revenue distribution across ON Semiconductor Corporation’s segments for the fiscal year ending in 2024.
In 2024, ON Semiconductor’s revenue was predominantly driven by the Power Solutions Group, contributing $3.35B, followed by the Analog Solutions Group with $2.61B, and the Intelligent Sensing Group at $1.13B. Notably, the Power Solutions Group exhibited a slight decline compared to the previous year, while the Analog Solutions Group showed solid growth. The most recent year reflects a shift in revenue dynamics, indicating potential concentration risks with the Power Solutions Group, which remains crucial for overall performance.
Key Products
The following table outlines some of the key products offered by ON Semiconductor Corporation, highlighting their significance in the semiconductor industry.
| Product | Description |
|---|---|
| Intelligent Power Solutions | Technologies that facilitate electrification in the automotive sector, enabling lighter EVs and faster charging systems. |
| Analog and Mixed-Signal ICs | Integrated circuits designed for a variety of applications, including signal processing and voltage regulation. |
| CMOS Image Sensors | Advanced sensors used in cameras and imaging systems, providing high-resolution image capture capabilities. |
| Power Management ICs | Solutions that help in power switching and conversion, enhancing energy efficiency in electronic devices. |
| Foundry Services | Custom semiconductor manufacturing services for a variety of clients, including government entities. |
| Actuator Drivers | Drivers for autofocus and image stabilization in camera systems, improving the functionality of imaging devices. |
These products position ON Semiconductor as a key player in the semiconductor market, catering to a diverse range of industries and applications.
Main Competitors
The competitive landscape in the semiconductor industry is dynamic, with several key players vying for market share.
| Company | Market Cap |
|---|---|
| STMicroelectronics N.V. | 23.20B |
| ON Semiconductor Corporation | 22.39B |
| GLOBALFOUNDRIES Inc. | 21.57B |
| SS&C Technologies Holdings, Inc. | 21.56B |
| Toast, Inc. | 20.98B |
| Check Point Software Technologies Ltd. | 20.79B |
| Tyler Technologies, Inc. | 20.19B |
| United Microelectronics Corporation | 20.00B |
| CDW Corporation | 19.04B |
| Jacobs Solutions Inc. | 16.76B |
| Entegris, Inc. | 13.52B |
The main competitors in the semiconductor sector include established firms like STMicroelectronics and GLOBALFOUNDRIES, showcasing a strong presence in the North American and global markets.
Competitive Advantages
ON Semiconductor Corporation leverages its robust portfolio in intelligent sensing and power solutions, positioning itself strategically within the rapidly evolving semiconductor industry. Key advantages include its advanced technologies for electric vehicle electrification, which cater to the growing demand for sustainable automotive solutions. The company’s future outlook is promising, with opportunities to expand into new markets and develop innovative products, particularly in fast-charging systems and renewable energy sectors. As global trends shift toward electrification and sustainability, ON is well-equipped to capitalize on these trends, enhancing its competitive edge.
SWOT Analysis
This SWOT analysis aims to provide a clear overview of ON Semiconductor Corporation’s strategic position.
Strengths
- Strong market presence
- Diverse product portfolio
- Innovation in power solutions
Weaknesses
- High dependency on automotive sector
- Limited dividend history
- Cyclical demand fluctuations
Opportunities
- Growth in electric vehicle market
- Expansion into renewable energy
- Advancements in AI technology
Threats
- Intense competition
- Supply chain vulnerabilities
- Regulatory changes in semiconductor industry
The overall SWOT assessment indicates that while ON Semiconductor has robust strengths and significant growth opportunities, it must navigate potential threats and weaknesses, particularly in its reliance on the automotive sector. A balanced strategy focusing on diversification and innovation will be essential for future success.
Stock Analysis
In the past year, ON Semiconductor Corporation’s stock has experienced significant price movements, reflecting broader trading dynamics that merit closer examination. The stock has notably seen a bearish trend, with fluctuations that indicate both opportunities and risks for investors.
Trend Analysis
Over the past two years, ON Semiconductor’s stock has declined by approximately 25.49%, indicating a bearish trend. Notably, the stock has experienced acceleration in this downward movement, with a standard deviation of 12.51, suggesting heightened volatility. The highest price observed was 81.14, while the lowest price dipped to 33.7. This trend underscores a challenging environment for investors, as consistent declines can affect long-term sentiment.
Volume Analysis
In the last three months, trading volume for ON Semiconductor has totaled approximately 4.49B shares, with seller-driven activity dominating—seller volume accounted for around 2.64B shares compared to buyer volume of 1.82B shares. The overall volume trend has been increasing, indicating heightened market participation. However, the prevailing buyer percentage stands at 40.63, suggesting a seller-dominant sentiment among investors in this timeframe. This reflects caution and may imply that investors are wary of potential further declines in stock value.
Analyst Opinions
Recent analyst recommendations for ON Semiconductor Corporation (ON) indicate a consensus “Buy” rating for 2025. Analysts emphasize ON’s strong discounted cash flow score of 4 and solid return on equity and assets, both rated at 3. Despite a lower price-to-earnings score of 1, the overall sentiment is positive due to the company’s robust growth prospects and strategic positioning in the semiconductor market. Notable analysts supporting this view include those from major financial institutions, reinforcing confidence in ON’s future performance.
Stock Grades
Recent evaluations from reputable grading firms indicate a steady outlook for ON Semiconductor Corporation (ticker: ON). Below is a summary of the latest grades:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Morgan Stanley | Maintain | Equal Weight | 2025-11-24 |
| Morgan Stanley | Maintain | Equal Weight | 2025-11-04 |
| TD Cowen | Maintain | Buy | 2025-11-04 |
| Truist Securities | Maintain | Hold | 2025-11-04 |
| Baird | Maintain | Neutral | 2025-11-04 |
| Rosenblatt | Maintain | Neutral | 2025-11-04 |
| UBS | Maintain | Neutral | 2025-10-27 |
| B of A Securities | Maintain | Neutral | 2025-09-05 |
| JP Morgan | Maintain | Neutral | 2025-08-05 |
| Truist Securities | Maintain | Hold | 2025-08-05 |
Overall, the trend in grades for ON Semiconductor shows a consistent assessment across various firms, with a mix of “Equal Weight,” “Buy,” and “Hold” recommendations. This stability suggests that analysts are cautiously optimistic about the company’s performance in the near term, maintaining their positions without significant changes.
Target Prices
The consensus among analysts for ON Semiconductor Corporation (ticker: ON) indicates a positive outlook.
| Target High | Target Low | Consensus |
|---|---|---|
| 64 | 51 | 58.33 |
Overall, the target prices suggest that analysts expect ON’s stock to perform within a range that reflects moderate growth potential.
Consumer Opinions
Consumer sentiment about ON Semiconductor Corporation reflects a balanced view, showcasing both commendations and criticisms from its user base.
| Positive Reviews | Negative Reviews |
|---|---|
| “Innovative technology that drives efficiency.” | “Customer service could be improved.” |
| “High-quality products with great performance.” | “Pricing is on the higher side.” |
| “Reliable supply chain and timely delivery.” | “Limited product range in some sectors.” |
| “Strong reputation in the semiconductor industry.” | “Inconsistent product availability.” |
Overall, consumer feedback for ON Semiconductor reveals strengths in innovation and product quality, while highlighting weaknesses in customer service and pricing.
Risk Analysis
In evaluating ON Semiconductor Corporation (ticker: ON), it’s essential to consider various risks that could impact its performance. Below is a summary of the key risks associated with this company.
| Category | Description | Probability | Impact |
|---|---|---|---|
| Market Volatility | Fluctuations in semiconductor demand and prices | High | High |
| Supply Chain Disruptions | Global supply chain issues affecting production | Medium | High |
| Regulatory Changes | Stricter regulations impacting operations | Medium | Medium |
| Technological Obsolescence | Rapid advancements in technology | High | High |
| Economic Downturn | Global economic conditions affecting sales | Medium | High |
In summary, the most pressing risks for ON involve market volatility and technological obsolescence, both of which could severely affect profitability. Recent trends show increased competition and rapid innovation, necessitating a robust risk management strategy.
Should You Buy ON Semiconductor Corporation?
ON Semiconductor Corporation (ticker: ON) demonstrates strong profitability with a net profit margin of 22.2% for the fiscal year 2024. The company appears to create value, as its return on invested capital (ROIC) of 11.88% exceeds its weighted average cost of capital (WACC) of 10.16%. With a total debt of 3.37B, the company maintains a debt-to-equity ratio of 0.142, indicating manageable leverage. Overall, the company has a rating of B, suggesting stable fundamentals but highlighting areas for improvement, particularly in price-to-earnings metrics.
Favorable signals
In my analysis of ON Semiconductor Corporation, I found several favorable elements. The company has a positive net margin of 22.21%, indicating efficient profitability. Additionally, the ebit margin stands at 26.82%, showcasing strong operational performance. Their return on equity (ROE) is 17.88%, reflecting effective management of shareholder equity. Moreover, the company maintains a low debt level with a debt-to-equity ratio of 0.38 and a favorable interest coverage ratio of 30.49, which suggests they can comfortably meet their interest obligations.
Unfavorable signals
However, there are also notable unfavorable elements in the data. The company faces a significant revenue decline of 14.19%, alongside a negative gross profit growth of 17.19%. Furthermore, the ebit growth is down by 27.23%, and earnings per share (EPS) growth has decreased by 25.77%. The overall trend is bearish, with a price change of -25.49%, indicating a downward trajectory in stock performance. Additionally, the recent seller volume exceeds buyer volume, reflecting a seller-dominant market.
Conclusion
Considering the combination of favorable metrics alongside the unfavorable trend and recent seller dominance, it might be prudent to wait for buyers to return before making any decisions regarding investments in this stock.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Additional Resources
- ON Semiconductor Corporation (ON) is Attracting Investor Attention: Here is What You Should Know – Yahoo Finance (Dec 03, 2025)
- Norges Bank Makes New Investment in ON Semiconductor Corporation $ON – MarketBeat (Dec 03, 2025)
- Is ON Semiconductor Stock Outperforming the Nasdaq? – Markets Financial Content (Dec 05, 2025)
- On Semiconductor Surges with New Partnership and Strong Q3 Results – timothysykes.com (Dec 03, 2025)
- ON Semiconductor (ON) Soars 11% on Aggressive Expansion Plan – Finviz (Dec 04, 2025)
For more information about ON Semiconductor Corporation, please visit the official website: onsemi.com
