stockrowWhat it does
ON Semiconductor Corporation, known as onsemi, makes power and sensing semiconductors for automotive, industrial and other markets, including AI data centers. Founded in 1992 and headquartered in Scottsdale, the company is led by chief executive Hassane El-Khoury.
Its power chips control and convert electricity inside equipment. In vehicles, they support electric drivetrains, charging and power management. In industrial applications, they are used in energy generation and storage, motor controls and automation. In data centers, they help manage power from the power supply to components near processors.
Onsemi’s sensing products capture information about the physical environment. Its image sensors and related processors support driver-assistance and vehicle safety systems, machine vision and robotics. Its products also serve applications such as medical monitoring devices and factory automation.
The company sells to equipment makers directly and through distributors. Its customers use the chips in finished products ranging from vehicles and charging infrastructure to industrial machinery and computing equipment. Onsemi also develops products for customers under development agreements, although those agreements contribute much less revenue than semiconductor sales.
Onsemi organizes its business into power solutions, analog and mixed-signal products, and intelligent sensing. Its operations include chip design, wafer fabrication, assembly and testing, supplemented by outside manufacturers.
How it makes money
Onsemi generates revenue primarily by selling semiconductor products to distributors and direct customers. It also receives a smaller amount from product development agreements.
In FY2025, revenue was $5,995.4 million; in Q3 2026, revenue was $1.72 billion.
The Power Solutions Group, or PSG, sells discrete chips, modules and integrated devices that convert and manage power. Its products include silicon carbide devices, MOSFETs, power modules and gate drivers. They are used in electric vehicles, charging systems, energy infrastructure and AI data centers. PSG generated $2.8 billion of revenue in FY2025.
The Analog and Mixed-Signal Group, or AMG, supplies products that manage power, connect systems and process signals from sensors. Its range includes converters, controllers, isolation and logic products, and sensor interfaces. AMG generated $2.3 billion of revenue in FY2025.
The Intelligent Sensing Group, or ISG, makes image sensors, image signal processors and other sensing devices for automotive safety, industrial automation and robotics. ISG generated $928.4 million of revenue in FY2025.
Sales are made primarily through orders that can be booked as far as 52 weeks before delivery. Prices and quantities are generally fixed when an order is booked, although customers can revise orders and shipment schedules. Sales agreements are periodically renewable; distributors have limited return and stock-rotation rights, while direct customers generally cannot return products other than under warranty. The business therefore receives repeat product orders, rather than relying primarily on a subscription model.
Onsemi reports AI data center revenue separately as an end market beginning in Q3 2026; that market spans products from its business units rather than replacing them.
| Segment | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| PSG | $2.8 billion | 46.8% | −16.2% |
| AMG | $2.3 billion | 37.7% | −13.3% |
| ISG | $928.4 million | 15.5% | −17.5% |
Customers and how it sells
Onsemi sells to direct customers and distributors, whose end customers include original equipment manufacturers and contract manufacturers. Large multinational companies and selected regional equipment makers form its core direct customer base. Distributors provide fulfillment and resell onsemi products to end customers.
Distributors accounted for approximately 54% of revenue in 2025, and direct customers for approximately 46%. One distributor accounted for approximately 11% of total revenue in 2025. Sales agreements with key customers are renewable periodically, and the loss of a large customer could affect the relevant segment and the company’s consolidated results.
By end market, automotive represented 51% of 2025 revenue, industrial 28%, and other markets 21%. The other category included AI data centers, computing, consumer products, networking and communications. In Q3 2026, onsemi began volume shipments to multiple platforms, including Google, for power-supply and voltage-conversion applications.
Onsemi has distribution centers in China, the Philippines and Singapore, alongside global and regional distribution channels. Revenue geography is based on where sales are billed, not necessarily where chips are ultimately used. In FY2025, Hong Kong accounted for 27.3% of revenue, the United Kingdom 22.5%, Singapore 20.9%, and the United States 20.5%.
| Region | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Hong Kong | $1.6 billion | 27.3% | −8.12% |
| United Kingdom | $1.3 billion | 22.5% | −17.8% |
| Singapore | $1.3 billion | 20.9% | −27.7% |
| United States | $1.2 billion | 20.5% | −5.88% |
| Other | $530.6 million | 8.85% | −15.0% |
Suppliers and costs
Onsemi manufactures some products itself and uses contractors for some wafer fabrication, assembly and testing. It operates wafer fabrication facilities in the United States, the Czech Republic, Japan, South Korea and Malaysia, as well as assembly and test sites in several countries. Its facilities also produce silicon carbide crystal material and silicon and silicon carbide wafers.
Outside manufacturers accounted for approximately 34% of total manufacturing input costs in 2025. Their agreements typically require onsemi to forecast needs and commit to purchases, sometimes over longer periods. Manufacturing materials include silicon and silicon carbide wafers, metals, packaging materials, chemicals and gases. Suppliers may extend lead times, restrict supply or raise prices.
Manufacturing utilization affects costs: lower sales volumes left facilities underused in 2025. Onsemi’s manufacturing realignment also resulted in restructuring, impairment and inventory charges. Gross margin was 33.1% in 2025, compared with 45.4% in 2024.
In Q3 2026, the company closed the divestiture of a back-end facility in the Philippines. It remained supply-limited in certain technology segments and directed some supply toward AI data center and industrial demand.
- Revenue$6.0B
- Cost of revenue−$4.0B
- Research and development−$583.6M
- Selling, general and administrative−$604.8M
- Other operating costs−$711.3M
- Operating income$84.2M
Competitive position
Onsemi competes with international semiconductor companies and smaller specialists. It also faces competition from integrated-circuit makers and customers that develop their own chips.
In power products, its named competitors include Infineon, STMicroelectronics, Wolfspeed, ROHM Semiconductor and Nexperia. Competition includes new devices and packaging that improve power density and efficiency. In analog and mixed-signal products, competitors include Texas Instruments, Analog Devices, Renesas, Monolithic Power Systems and NXP, as well as Infineon and STMicroelectronics. Sony Semiconductor Manufacturing, Samsung Electronics and Omnivision compete in sensing products.
Onsemi uses patents, trade secrets, technical know-how and other intellectual property protections. It does not consider itself substantially dependent on any single patent. It also maintains customer relationships, develops products for particular applications and manufactures silicon carbide devices through an integrated production strategy.
Our reading: Manufacturing capabilities and product breadth provide a meaningful competitive position in power, but rivals with substantial resources and competing technologies limit its strength.
Our reading: Customer relationships and design experience can help onsemi retain business across product cycles, although customers can develop their own chips and compete with it.
Our reading: Intellectual property and sensing expertise provide protection, but the absence of dependence on a single patent does not establish an exclusive barrier across the portfolio.
| Competitor | Where they compete | Threat (our reading) |
|---|---|---|
| Infineon Technologies AG | Power and analog semiconductors | High |
| STMicroelectronics N.V. | Power and analog semiconductors | High |
| Wolfspeed Inc. | Power semiconductors | Medium |
| ROHM Semiconductor | Power semiconductors | Medium |
| Nexperia BV | Power semiconductors | Medium |
| Texas Instruments Incorporated | Analog and mixed-signal products | Medium |
| Analog Devices, Inc. | Analog and mixed-signal products | Medium |
| Renesas Electronics Corporation | Analog and mixed-signal products | Medium |
Growth opportunities
Onsemi is investing in power and sensing products for vehicle electrification, automated driving, industrial energy systems, robotics and AI data centers. It aims to increase its semiconductor content as vehicles and other systems add electronics and change their power architectures.
In AI data centers, onsemi sells products across the power system, from power supplies to stages near the processor. AI data center revenue was $180 million in Q3 2026, and the company expects approximately $620 million for 2026. It expects that revenue to double in 2027. The company has raised its 2030 AI data center revenue target to greater than $3 billion.
Onsemi’s embedded power platform is being sampled by early customers in automotive, industrial and AI data center markets. It uses the silicon wafer as a package to address electrical, thermal and mechanical constraints. The company also announced an agreement to acquire Ferric, which develops integrated voltage regulators. Onsemi expects the transaction to close in the fourth quarter, subject to customary closing conditions.
In industrial markets, onsemi has expanded power-module design wins with customers including SunGrow and Senang. It has also secured designs with U.S. humanoid robot makers across power, connectivity and sensing. In automotive, onsemi is pursuing designs for electric vehicles and newer vehicle power architectures.
Onsemi also continues to resize its manufacturing footprint and invest in research and development. It expects utilization and new-product mix to support margin expansion as demand develops.
- $6.7BFY2021
- $8.3BFY2022
- $8.3BFY2023
- $7.1BFY2024
- $6.0BFY2025
Structural risks
- Demand and utilization: The semiconductor industry is cyclical. In 2025, lower automotive and industrial demand reduced sales volumes and left manufacturing facilities underused, contributing to lower gross margins.
- Supply and manufacturing: Production depends on numerous processes and third-party manufacturers. Disruptions, supplier limits or higher input prices can affect operations. In 2026, constraints in specific production lines led onsemi to allocate supply toward AI data center and industrial customers rather than automotive inventory replenishment.
- Customer and order exposure: One distributor represented approximately 11% of 2025 revenue. Orders and shipment schedules can be revised, and customers can cancel some orders before shipment. Losing a large customer could materially affect results.
- Competition and technology: Some competitors have greater resources, and customers may develop their own chips. Onsemi’s ability to compete depends on timely product development, performance, manufacturing yields, supply and pricing.
- Execution and regulation: Manufacturing realignment has produced impairment and inventory charges, while acquisitions may not be integrated successfully. Environmental, health and safety liabilities, trade restrictions, intellectual property claims and cybersecurity breaches could also adversely affect the business.
Bottom line
Our reading
Our reading: Onsemi is a semiconductor business built around power conversion and sensing, with established automotive and industrial demand and a growing AI data center opportunity. Its manufacturing footprint and customer relationships support that position, but also expose results to utilization, supply constraints and changes in customer orders. The 2025 downturn and the subsequent allocation of constrained supply show why demand and capacity must be assessed together.