ON — onsemi (ON Semiconductor)
TL;DR
onsemi is a key player in power semiconductors, particularly in silicon carbide (SiC) and gallium nitride (GaN), which are critical for electric vehicles (EVs), industrial automation, and data centers. The company is well-positioned to benefit from the increasing adoption of wide-bandgap semiconductors due to their efficiency advantages over traditional silicon. Recent design wins and capacity expansions suggest strong growth potential, though competition and cyclical demand remain risks.
Business
onsemi designs and manufactures a broad range of semiconductor products, including power management ICs, image sensors, and discrete components. The company serves markets such as automotive, industrial, and communications. Its recent focus on SiC and GaN semiconductors has been a key driver of growth, particularly in the EV and renewable energy sectors.
Thesis
- Wide-bandgap leadership: onsemi is a leader in SiC and GaN semiconductors, which offer superior efficiency for high-power applications compared to traditional silicon. This positions the company well for growth in EVs, industrial automation, and data centers.1
- Design wins in EVs: Recent design wins with North American automakers for SiC MOSFETs in traction inverters highlight the growing adoption of onsemi’s technology in the EV market.1
- Capacity expansion: The company is scaling production of SiC semiconductors, including plans for a 200mm SiC fab, to meet increasing demand from automotive and industrial customers.1
- Energy efficiency focus: onsemi’s products are increasingly being used in applications where energy efficiency is critical, such as data centers and renewable energy systems.1
Risks
- Cyclical demand: The semiconductor industry is highly cyclical, and onsemi could face demand volatility, particularly in the automotive and industrial sectors.1
- Competition: onsemi faces intense competition from other semiconductor manufacturers, particularly in the SiC and GaN markets.1
- Manufacturing challenges: Scaling production of SiC semiconductors is complex and costly, and any delays or issues could impact growth.1
Recent catalysts
- 2025-06-12 — Secured a 750V SiC MOSFET design win with a North American plug-in hybrid OEM, with production expected in 2H25.1
- 2025-06-23 — Toyota’s new bZ5 crossover rolled off the line with onsemi’s fourth-gen SiC MOSFETs in the traction inverter.1
- 2025-07-10 — Announced plans to scale SiC production, including a 200mm SiC fab, to meet growing demand.1
Second-order reads
- 2025-07-10 — Citrini Research — Robotics Update — Teradyne’s success with robotics could drive demand for power semiconductors, benefiting onsemi as a supplier.1