Track market-moving stories before they get noisy

On Semiconductor (ON) is positioned for a potential re-rating ahead of its Investor Day 2026, driven by a massive TAM upgrade to $213B by 2030. The $7B Synaptics acquisition expands ON's TAM by 233%, despite a 12-14% shareholder dilution and balance sheet concerns. ON's growth hinges on capitalizing on the AI data center shift to 800V DC power, with management targeting higher fab utilization and gross margins.

SummaryON Semiconductor is positioned as a key enabler of physical AI, focusing on power, sensing, and control layers essential for robotics and automation.ON's proposed Synaptics acquisition strategically fills its edge compute and tactile sensing gap, making its semiconductor stack more complete for physical AI applications.Current AI data center revenue acceleration and a recovering core business underpin ON's near-term earnings, with physical AI as an upside rather than a necessity.I rate ON a Buy, as valuation is reasonable relative to growth, and Synaptics integration offers further upside if executed effectively. J Studios/DigitalVision via Getty Images

Every month, I pick one investment theme and work through it in three articles. Last month, I covered three layers of stocks that could benefit from the AI boom. September’s theme is physical AI. The first

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Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Key Takeaways STM posted strong automotive growth, backed by EV design wins and rising SiC demand.STM expects 21.8% 2026 revenue growth and a 145.3% EPS increase, ahead of ON's estimates.ON's EV opportunity remains strong, but capacity constraints are limiting near-term automotive growth. The semiconductor industry is becoming increasingly important to the automotive sector as electric vehicles (EVs) demand more advanced chips for power management, connectivity, safety and vehicle electrification. Against this backdrop, STMicroelectronics N.V. (STM - Free Report) and ON Semiconductor Corporation (ON - Free Report) offer investors exposure to the growing automotive semiconductor market, but with different business strengths and growth opportunities.

As both companies navigate uneven demand, evolving EV adoption and the broader semiconductor cycle, a closer comparison of their growth prospects, financial performance and strategic positioning can help determine which stock presents the more compelling investment opportunity.

The Case for STMSTMicroelectronics delivered a strong performance in automotive during the second quarter, with revenues rising 14% sequentially and 16% year over year. Growth was supported by application-specific ICs and sensors used in electric powertrains, ADAS and other automotive applications. The company also continued to secure design wins across hybrid, electric and conventional vehicles, including onboard chargers, powertrain and active-suspension applications.

STM's power semiconductor business is showing signs of improvement, particularly in silicon carbide (SiC), which is important for EV powertrains and higher-voltage vehicle architectures. Management said second-quarter 2026 SiC revenues grew in the low teens year over year and roughly mid-30s sequentially, supported by strong bookings and a growing backlog. STM expects SiC revenues to increase at a double-digit rate in 2026, backed by existing design wins and visible backlog.

STM's broader business recovery provides additional support for its EV opportunity. Second-quarter revenues increased 26.1% year over year to $3.49 billion, while automotive sales rose 16%. Gross margin improved 130 basis points year over year to 34.8%, and the company returned to profitability, reporting non-GAAP EPS of 31 cents versus a loss of 11 cents a year earlier. Management also expects third-quarter 2026 revenues of about $3.7 billion at the midpoint, up 16.2% year over year.

Despite the improving business trends, STM's profitability is still being weighed down by its manufacturing reshaping program. Management said technology transfers, product qualifications and related costs will continue to pressure gross margins through the second half of 2026. The company also expects some temporary supply constraints as it transitions SiC production from 6-inch to 8-inch wafers and analog production from 8-inch to 12-inch technology.

The Case for ONON Semiconductor is gaining traction in China’s electric-vehicle market, where automotive revenues increased 13% in the first half of 2026 despite overall vehicle sales declining 4%. The company is benefiting from higher semiconductor content per vehicle and market-share gains with customers including Geely Zeekr and Xiaomi. Management expects automotive silicon carbide revenues in China to increase 60-70% year over year as existing programs ramp and new vehicle platforms launch.

ON is expanding its role in next-generation EV architectures through a broader portfolio of power, sensing and connectivity products. ON Semiconductor’s design win on Rivian’s R2 platform is one example, with ON’s MOSFETs supporting power distribution and its silicon carbide solutions used in the onboard charging system. The company is also seeing increasing contributions from newer products such as 10BASE-T1S Ethernet and inductive and ultrasonic sensing, supporting its goal of growing faster than overall vehicle production through higher content and market-share gains.

ON's improving operating performance strengthens the investment case beyond its EV opportunity. Second-quarter revenues rose 9% year over year to $1.6 billion, while non-GAAP gross margin expanded to 39.3%, up 80 basis points sequentially. Free cash flow reached $425 million, and the company returned $332 million to its shareholders through share repurchases. Management expects further margin expansion as higher utilization flows through the income statement, with third-quarter gross margin guided to 40-42% and EPS of 81 cents-93 cents.

The key risk is that ON had to prioritize rapidly accelerating AI data-center demand over some automotive and industrial shipments during the second quarter because of supply constraints. Automotive revenues consequently declined 2% sequentially, although the metric still increased 7% year over year. Management expects auto revenues to grow at a low-single-digit rate in the third quarter, while manufacturing catches up with demand. This suggests that near-term automotive growth could remain somewhat constrained by capacity allocation even as the longer-term EV opportunity remains strong.

What Do Analyst Estimates Signal for STM and ON?The Zacks Consensus Estimate projects STMicroelectronics’ 2026 revenues to increase 21.8% year over year, while earnings per share are expected to surge 145.3% to $1.30, up from 53 cents in 2025. The upward revisions of STM’s 2026 estimates over the past 30 days further suggest growing analyst confidence in its earnings recovery and business outlook.

Image Source: Zacks Investment Research

For ON Semiconductor, the Zacks Consensus Estimate calls for 9.5% year-over-year revenue growth in 2026, with earnings per share expected to rise 37.5%. Analysts have also raised their 2026 earnings estimates over the past 30 days, pointing to improving expectations for ON’s profitability and growth prospects. Overall, STM has the edge on expected revenue and EPS growth, while both companies are benefiting from upward revisions to earnings estimates.

Image Source: Zacks Investment Research

Price Performance & ValuationSTM stock has surged 47.1% in the past six months compared with the S&P 500’s growth of 11%. Conversely, ON’s shares have risen 9% in the same time frame.

Price Performance
Image Source: Zacks Investment Research

STM is trading at a forward 12-month price-to-earnings ratio of 21.88X, below its median of 26.04X over the last year. ON’s forward earnings multiple sits at 17.89X, down from its median of 20.17X over the same time frame.

P/E (F12M)
Image Source: Zacks Investment Research

End NotesAlthough both stocks offer attractive exposure to the EV semiconductor market, STM has a slight edge over ON in this faceoff. STM's stronger expected growth, improving earnings outlook, solid EV design-win pipeline and accelerating silicon carbide momentum make its growth story more compelling.

ON also has strong EV and SiC opportunities, particularly in China, along with improving margins and robust cash generation. However, near-term automotive growth is being affected by capacity constraints and the prioritization of AI data-center demand. STM's relatively attractive valuation and stronger earnings-growth prospects further tilt the comparison in its favor. In conclusion, both STM and ON carry a Zacks Rank #3 (Hold), but the former emerges as the slightly more compelling EV semiconductor stock.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Ken Rizvi, the chief financial officer of Synaptics Incorporated (SYNA -0.35%), reported the disposition of 17,251 shares on August 17, according to an SEC Form 4 filing.

Transaction summaryMetricValueShares sold (directly held)17,251Transaction value$1.9 millionPost-transaction shares (directly held)134,365Post-transaction value$14.86 millionTransaction value based on SEC Form 4 weighted average sale price ($110.58); post-transaction value based on the August 17 market close ($110.58).

Key questionsWhat was the motivation behind this equity disposition?
The transaction was a non-discretionary event where 17,251 shares were withheld by the company to cover tax liabilities associated with the vesting of restricted stock units, performance stock units, and market stock units.How does this impact the insider's long-term position in the company?
While direct holdings decreased to 134,365 shares, the activity was triggered by automated tax arrangements and does not reflect a change in the insider's discretionary outlook on the company.What is the current scale of the company's operations and financial standing?
Synaptics is a San Jose-based technology firm with 1,700 employees and a market capitalization of $4.1 billion, reporting trailing twelve-month revenue of $1.2 billion and a net loss of $490.8 million.Company OverviewMetricValueShare Price (as of market close 2026-08-18)$104.83Market Capitalization$4.1 billionRevenue (TTM)$1.2 billionNet Income (TTM)-$490.8 millionCompany SnapshotSynaptics develops and markets a comprehensive portfolio of semiconductor solutions, including AudioSmart for advanced sound and voice processing, ConnectSmart for high-speed multimedia connectivity, and DisplayLink for compressed video transmission, generating revenue across audio, video, and connectivity product categories.The company operates a fabless semiconductor business model, designing specialized chips for consumer electronics and computing devices while outsourcing manufacturing, allowing for capital-efficient scaling and rapid product innovation.Synaptics serves original equipment manufacturers and system integrators in the consumer electronics, personal computing, and mobile device markets, with primary customers including major laptop, tablet, and smartphone manufacturers.Synaptics Incorporated is a global semiconductor solutions provider with a market capitalization of $4.1 billion, employing 1,700 professionals from its San Jose headquarters. The company specializes in human-machine interface and connectivity technologies that enhance user experience across diverse consumer and computing platforms. With TTM revenue of $1.2 billion, Synaptics maintains a strategic focus on audio, video, and connectivity solutions while navigating near-term profitability challenges in a competitive semiconductor landscape.

What this transaction means for investorsRizvi had 17,251 shares withheld on August 17 to cover taxes on vested restricted, performance, and market stock units, the same day Synaptics' chief strategy officer, Satish Ganesan, had shares withheld for the same reason on his own vesting event. For both of these transactions, nothing about the size or timing points to a change in outlook from either of the execx.

More important for Synaptics shareholders is the pending onsemi acquisition, a deal the two companies pegged at $7.8 billion in combined 2026 revenue when they announced it in June, with closing anticipated by mid-2027. Per the deal terms, onsemi shareholders will own about 88% of the combined company once it closes, with Synaptics shareholders holding the remaining 12%. The combined entity is expected to carry $5.4 billion in gross debt against $4.2 billion in cash at announcement. On the stand-alone numbers, Synaptics closed fiscal 2026 with non-GAAP gross margin expanding 100 basis points to 54.5% in the fourth quarter, even as GAAP gross margin held flat at 44.7% for the full year. Rizvi summed up his approach on an earlier call, saying simply, "We remain focused on disciplined execution."

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool recommends Synaptics. The Motley Fool has a disclosure policy.

Power semiconductor stocks are pushing higher in Monday trading, with Wolfspeed (NYSE:WOLF | WOLF Price Prediction) up 5.74% to $33.61, STMicroelectronics (NYSE:STM) up 4.17% to $56.56, and ON Semiconductor (NASDAQ:ON) up 2.96% to $85.11. The move follows a weekend Mizuho research note flagging a stronger and faster NVIDIA Vera Rubin ramp than the market had been positioned for.

Vera Rubin Ramp Signals Reset the Power Semi Setup Mizuho, in a note published Sunday, August 16, 2026, told clients to expect strong VR200 NVL72 ramps in 2027, ramping in Q4 2026 led by xAI and Meta, with NVIDIA potentially pushing the four-die transition out to Feynman and running VR-Ultra on a two-die configuration. The firm also flagged 2027 CoWoS growing more than 75% with NVIDIA and Broadcom and cloud service provider RPO/backlog now at $2.3 trillion, up 3.5x year over year.

Mizuho’s named upside list covers Dell, Credo, NVIDIA, Broadcom and Lumentum, while the three power names moving here benefit indirectly. The connection is a read-through: Vera Rubin materially raises power management content per rack, so a bigger, on-schedule VR200 ramp means more power semiconductor content shipped across the rack, alongside more GPUs. Just as important, weeks of chatter about a Vera Rubin delay had weighed on the group. A supply chain check pointing to xAI and Meta anchoring a Q4 2026 ramp removes that overhang, and the removal is itself the catalyst.

Content Per Rack Is the Story ON Semiconductor has been the loudest voice on this. Management said content per rack goes from $15,000 per rack today toward $115,000 per rack under 800V DC architecture, with AI data center revenue expected to more than double in 2026 and silicon carbide in data center applications projected to grow nearly 60% year-over-year. CEO Hassane El-Khoury framed the company as “the only broad-based U.S. power semiconductor supplier with technologies spanning the full AI power tree.”

STMicroelectronics raised its data center ambition to above $1 billion in 2026 and well above $2 billion in 2027, with CEO Jean-Marc Chery citing accelerating adoption of 800 gigabit and 1.6 terabit per second pluggable optics. Wolfspeed reported ~30% sequential growth in AI applications in fiscal Q3 and launched its first commercially available 10 kilovolt silicon carbide power MOSFET for high-voltage data center power delivery.

Longer-period context supports the setup. STM is up 110.14% year to date, ON is up 52.65%, and Wolfspeed is up 82.6%, though all three had drifted lower over the past month before Monday’s rally.

13F Backdrop Filed Friday Position disclosures as of June 30, 2026 and filed August 14, 2026 add background color rather than a direct catalyst.

In Wolfspeed, Two Sigma added to 2,272,968 shares valued $109,670,706, Millennium added to 1,012,371 shares valued $48,846,901, and Renaissance Technologies opened a new position of 498,900 shares valued $24,071,925.

In ON, Point72 opened a new position of 1,606,182 shares valued $151,848,446 and Balyasny added to 1,517,790 shares valued $143,491,867.

In STM, Situational Awareness disclosed 7,802,700 shares valued $584,344,203. These are point-in-time snapshots as of the reporting date and may differ from current positions. For example, Situational Awareness had to sell their book as a block trade to Citadel since the latest quarter ended.

What to Watch The next hard checkpoint is ON Semiconductor’s Analyst Day on September 16, 2026 in New York, where management is expected to detail the AI power tree strategy. Investors will also parse NVIDIA’s next quarterly update for confirmation of the Q4 2026 VR200 ramp trajectory Mizuho described. Any wobble in that schedule would test today’s rerating in the group.

Contact [email protected] for any questions or corrections.

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

ON Semiconductor keeps making the case for accumulation, and the Q2 2026 report only strengthened it. Call it a study in conviction. The company I first bought as an auto-and-industrial cyclical is quietly becoming something else, and the market is still pricing it like the old story.

Here is what pulls me back. ON Semiconductor (NASDAQ:ON | ON Price Prediction) sells the intelligent power and silicon carbide content that goes inside AI server racks, EV powertrains, and grid-scale energy storage. CEO Hassane El-Khoury put it plainly on the Q2 call: “As the only broad-based U.S. power semiconductor supplier with technologies spanning the full AI power tree, we are uniquely positioned to support this transition from the grid all the way to the processor.” The thesis, in short: exposure to the whole power tree of AI, from the grid connection all the way to the processor.

The Receipts Behind the Conviction
AI data center revenue more than doubled year over year in Q2, and management expects the segment to more than double in full-year 2026. Content per rack is running at $15,000 today and the company is targeting $115,000 per rack by 2030. The addressable market they now see: $12 billion expanding to roughly $50 billion by 2030. That is the growth engine.

The cash story is what finances my accumulation. Free cash flow reached $425.4 million in Q2 2026, growth of 300.94% year over year. Non-GAAP gross margin came in at 39.3%, and Q3 guidance calls for 40.0% to 42.0%. Utilization moved from 77% to 83%, and CFO Thad Trent said the math is “25 to 30 basis points of gross margin improvement for every point of utilization.” That is operating leverage I can measure.

Capital return closes the loop. With no dividend in place, ON channels capital return entirely through buybacks, repurchasing roughly 105% of free cash flow to shareholders year to date, with $332 million repurchased in Q2 alone under a new $6 billion authorization over three years. FY2025 buybacks totaled $1.377 billion, roughly 100% of that year’s free cash flow. A shrinking share count against a rising earnings base is how shareholders benefit.

Why ON Stands Out Among Power Semi Peers
Texas Instruments (NASDAQ:TXN) is the default quality name in analog power, and Wolfspeed (NYSE:WOLF) is the pure-play silicon carbide bet. My money goes to ON because it holds the verified NVIDIA MGX design wins, an AWS power-supply and battery-backup design win, the Rivian R2 platform win, and silicon carbide revenue in China auto growing between 60% and 70% year over year. That combination of AI, EV, and industrial power inside one balance sheet is what I cannot replicate with the alternatives.

The Risk I Am Willing to Underwrite
The trailing P/E sits near 262 because earnings are still climbing out of the FY2025 trough. If AI data center demand slips or the Synaptics integration goes sideways, that multiple will bite. The Analog and Mixed-Signal Group also declined 2% year over year in Q2, a reminder that the recovery is uneven. My thesis holds because book-to-bill has been running well above 1 for several quarters and lead times stretched from 27 weeks to 32 weeks. Some customers are already ordering into 2028 to lock up supply. That tells me capacity is the current constraint.

The accumulation case rests on a simple point: the power tree of AI has to be built by someone, and few peers offer comparable exposure to that build-out at this valuation reset.

Contact [email protected] for any questions or corrections.

10.8.2026 11:24

Po nabitém minulém týdnu výsledková sezóna zpomaluje. V tuzemsku bude pozornost směřovat především k energetické společnosti ČEZ. V Německu budou reportovat například energetické společnosti E.ON a RWE, zajišťovna Hannover Re či distributor chemikálií Brenntag. Ve zbytku Evropy budou sledované výsledky společnosti ON Holding a Adyen. V USA se pozornost zaměří především na technologické tituly. Výsledky zveřejní Cisco Systems, Applied Materials, CoreWeave, Nebius, Super Micro Computer a Lumentum.

Přehled vybraných společností reportujících své výsledky v tomto týdnu (zdroj: síť X - Earnings Whispers)

Pondělí (10. 8.) Německo (před trhem): GEA Group

USA (před trhem): Barrick Mining, Ferguson Enterprises

USA (po trhu): Simon Property Group, Rocket Lab

Úterý (11. 8.) ČR (před trhem): ČEZ

Evropa (před trhem): On Holding

USA (před trhem): Sea, Cardinal Health, Venture Global

USA (po trhu): Lumentum Holdings, CoreWeave, Super Micro Computer

Středa (12. 8.) Německo (před trhem): E.ON, Hannover Re, Brenntag

USA (před trhem): Nebius Group, Amcor, Trimble

USA (po trhu): Cisco Systems, Coherent

Čtvrtek (13. 8.) Německo (před trhem): RWE

Evropa (před trhem): Adyen

USA (před trhem): JD.Com, Tapestry

USA (po trhu): Applied Materials

Zdroj: Bloomberg, Earnings Whispers

Marek Krejčiřík
Fio banka, a.s.
Prohlášení

onsemi (NASDAQ:ON) reported second-quarter 2026 results above the midpoint of its guidance, citing recovering demand, continued growth in AI data-center applications and improving operating leverage.

The semiconductor company generated $1.6 billion in revenue, up 6% sequentially and 9% from a year earlier. Non-GAAP gross margin rose 80 basis points from the prior quarter to 39.3%, while non-GAAP diluted earnings per share reached $0.74. The company generated $425 million in free cash flow and repurchased $332 million of shares during the quarter.

“Our second quarter results reflect the progress we have made in reshaping the business and our technology portfolio over the past several years and the strengthening demand environment,” President and CEO Hassane El-Khoury said on the company’s earnings call.

AI Data Center Demand Drives Growth AI data-center demand remained the company’s fastest-growing market and was the primary driver of growth in its “other” revenue category, which increased 34% sequentially to $400 million. The company said it now expects AI data-center revenue to more than double in 2026 compared with 2025.

El-Khoury said onsemi expanded its role in Nvidia’s MGX ecosystem, supplying advanced power systems for next-generation AI data centers. The company also secured two power-supply platform wins with Great Wall, a provider of power solutions for China’s cloud and AI-infrastructure market, and added design wins for AWS power-supply and battery-backup systems.

The company expects silicon carbide revenue in AI data-center applications to rise nearly 60% year over year in 2026. El-Khoury said the opportunity extends across the AI power chain, from high-voltage infrastructure to low-voltage delivery near processing units, rather than being limited to silicon carbide products.

Management also pointed to a transition toward 800-volt DC distribution architectures as a longer-term catalyst for higher semiconductor content. El-Khoury said the company expects that transition to begin ramping around late 2027 or early 2028, although deployments are expected to build gradually rather than create an immediate revenue step-up.

Automotive, Industrial Trends and Supply Conditions Automotive revenue totaled $781 million, down 2% sequentially but up 7% year over year. Chief Financial Officer Thad Trent said the sequential decline reflected seasonal demand patterns among certain European customers, partially offset by China. Automotive revenue was up approximately 6% year to date compared with 2025.

In China, onsemi said automotive revenue increased 13% in the first half of 2026 from the year-earlier period, despite a 4% decline in total vehicle sales. The company attributed the performance to expanding content per vehicle at customers including Geely, Zeekr and Xiaomi. It now expects automotive silicon carbide revenue in China to grow between 60% and 70% in 2026.

El-Khoury also cited recent content wins on Rivian’s R2 platform, where onsemi MOSFETs are used in power distribution for zonal controller architecture and silicon carbide products are used in onboard charging.

Industrial revenue was $423 million, up 1% sequentially and 4% year over year. Growth in energy infrastructure, medical and factory automation was partly offset by weakness in traditional industrial markets. The company expects energy-storage-system revenue to increase approximately 40% in 2026, led by North American microgrid customers.

Management said supply is tightening in several growth areas, with lead times extending to roughly 32 weeks on average from about 27 weeks. The company has seen increased orders within lead time, customer escalations and a book-to-bill ratio that has remained significantly above one for several quarters.

To meet accelerated AI data-center demand, onsemi prioritized some shipments to that market over automotive and industrial customers during the quarter. El-Khoury said the company expects manufacturing output to catch up with demand in the third and fourth quarters and said the prioritization did not have a material near-term customer impact.

Margins, Manufacturing Actions and Outlook Trent said the company’s manufacturing utilization rose to 83% in the second quarter from 77% in the first quarter. He said utilization changes generally take about two quarters to affect reported results and estimated that each percentage-point increase in utilization can support roughly 25 to 30 basis points of gross-margin improvement, assuming stable mix.

The company said it is implementing a second round of price increases to offset rising raw-material and external-manufacturing costs. El-Khoury said the cost increases apply across markets, including automotive, and that the company does not expect a softer pricing environment in 2027.

onsemi also announced divestitures of its Mountain Top and Philippines manufacturing facilities as part of its FabRight strategy to exit subscale legacy operations. Trent said the actions are expected to produce approximately $35 million in annualized savings, with initial benefits beginning in 2027 and full savings expected in 2028.

For the third quarter, the company forecast:

Revenue of $1.65 billion to $1.75 billion. Non-GAAP gross margin of 40% to 42%. Non-GAAP earnings per share of $0.81 to $0.93. Capital expenditures of $40 million to $50 million. By end market, management expects third-quarter automotive revenue to rise by low single digits sequentially, industrial revenue to be relatively flat, and other revenue to increase by high teens, supported by AI data-center demand.

Synaptics Deal El-Khoury also highlighted onsemi’s proposed acquisition of Synaptics, which the company expects to close in mid-2027, subject to customary approvals. He said Synaptics’ connected-compute capabilities would complement onsemi’s power, sensing and control offerings, while the combined company could leverage onsemi’s manufacturing scale, global sales channel and mass-market operations.

About onsemi (NASDAQ:ON) onsemi is engaged in disruptive innovations and also a supplier of power and analog semiconductors. The firm offers vehicle electrification and safety, sustainable energy grids, industrial automation, and 5G and cloud infrastructure, with a focus on automotive and industrial end-markets. It operates through the following segments: Power Solutions Group, Advanced Solutions Group, and Intelligent Sensing Group. The Power Solutions Group segment offers discrete, module, and semiconductor products that perform multiple application functions, including power switching, power conversion, signal conditioning, circuit protection, signal amplification, and voltage reference functions.

Key Takeaways ON expects 2026 AI data center revenues to more than double, with silicon carbide sales up nearly 60%.ON guides third-quarter revenues to $1.65B-$1.75B and gross margin to 40%-42% as utilization rises.ON's lead times reached about 32 weeks as book-to-bill stayed above 1 and some orders extended into 2028. ON Semiconductor Corporation (ON - Free Report) used its second-quarter 2026 earnings call to emphasize AI data center demand, tighter supply and operating leverage from higher factory utilization.

CEO Hassane El-Khoury raised the 2026 AI data center outlook to more than double last year, while CFO Thad Trent guided to sequential third-quarter revenue and gross-margin growth. Pricing, capacity and automotive demand dominated the Q&A.

ON Raises the AI Data Center OutlookEl-Khoury said AI data center remains onsemi’s fastest-growing market, supported by wins and more content across the power tree.

He cited an expanded NVIDIA MGX role, two Great Wall platform wins and designs supporting AWS power supplies and battery backup systems. He expects AI data center silicon carbide revenues to rise nearly 60% in 2026.

A Needham analyst asked whether revenues could exceed a $500 million level discussed earlier. El-Khoury declined to give a new figure but stressed that growth is sustained and spans high-voltage infrastructure through low-voltage delivery near the processor.

onsemi Sees a Margin Step-Up in Q3CFO Trent guided third-quarter revenues to $1.65-$1.75 billion, non-GAAP gross margin to 40%-42% and non-GAAP earnings to 81 cents-93 cents per share.

Second-quarter non-GAAP earnings of $0.74 topped the Zacks Consensus Estimate of $0.72. Revenues of $1.60 billion also exceeded the $1.59 billion consensus mark.

Trent said utilization rose to 83% from 77%, with the profit benefit reaching the income statement after about two quarters. He maintained that each utilization point can add 25 to 30 basis points to gross margin, assuming a consistent mix.

ON Addresses Supply and Capacity ConstraintsTrent said average lead times extended to about 32 weeks from 27 weeks, while book-to-bill remained significantly above 1. Some customers are ordering into 2027 and, in certain cases, 2028.

El-Khoury said onsemi prioritized AI data center power products over automotive and industrial shipments. He described the issue as timing because wafer-to-finished-goods cycles can take four to six months.

A Morgan Stanley analyst asked about capacity limits. Trent said utilization in the low 90% range is fully loaded, and capacity would not become a concern until revenues are 25% to 30% above the current run rate.

onsemi Keeps Auto Stable as China Gains BuildEl-Khoury characterized automotive demand as stable and said onsemi is shipping to end demand after the inventory correction. Automotive revenues were $781 million, down 2% sequentially on European seasonality but up 7% year over year.

First-half automotive revenues in China rose 13%, even as total vehicle sales declined 4%. He expects China automotive silicon carbide revenues to increase 60% to 70% in 2026.

A BofA Securities analyst asked whether pricing actions extend to automotive customers. El-Khoury said increases are being applied across markets to offset higher substrate, gold and other input costs, not to create a near-term margin lift.

ON Broadens the Power and Sensing StrategyEl-Khoury said AI investment is also lifting energy infrastructure demand. He expects energy storage system revenue to grow about 40% in 2026, led by North American microgrid customers.

The company released an EliteSiC hybrid module with 99.3% efficiency and began sampling a 500-kilowatt platform with 20% greater power density. He also highlighted Treo connectivity and sensing products as a source of design wins at favorable margins.

The planned Synaptics acquisition would add connected-compute capabilities to onsemi’s power, sensing and control portfolio. El-Khoury expects the transaction to close in mid-2027, subject to customary approvals.

ON Enters the Second Half With DisciplineManagement paired demand confidence with inventory and spending discipline. El-Khoury said onsemi is monitoring sell-through and channel inventory to avoid producing ahead of customer consumption.

Trent’s priorities remain supply catch-up, margin expansion and Fab Right execution. He expects those actions to produce about $35 million of annualized savings, with initial benefits in 2027.

Zacks Signals for ONON carries a Zacks Rank #3 (Hold). Its Momentum Score is B, while its Value, Growth and VGM Scores are D, showing stronger momentum than its other style readings. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Style Scores complement the Zacks Rank, with the strongest combinations generally pairing a Zacks Rank #1 or #2 (Buy) with A or B scores. ON’s current mix provides a favorable momentum signal but weaker support from the other styles. The Zacks Rank can change as estimates are revised after the just-reported results.

The AI boom is beginning to reshape more than demand—it’s changing who gets chips first.

“We prioritized shipments to AI data center over automotive and industrial,” CEO Hassane El-Khoury said, adding that the company redirected some constrained products toward AI customers while production works to catch up.

He later reiterated that ON Semi “did prioritize AI data center,” describing the move as beneficial for the company’s long-term growth and saying supply should improve during the second half of the year.

AI Is Changing Chip PrioritiesThe comments underscore how AI infrastructure is climbing to the top of chipmakers’ priority lists. ON Semi expects its AI data center revenue to more than double in 2026, driven by demand for power management chips used in next-generation AI servers and power systems.

For investors, the takeaway extends beyond ON Semi. As AI infrastructure spending accelerates, data center customers are increasingly competing with traditional markets such as automotive for semiconductor supply—a shift that could reshape priorities across the industry if demand continues to outpace production.

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The S&P 500 is on the brink of notching a record high as tech extends its recent rebound.

Chipmaker Onsemi on Monday forecast third-quarter revenue above Wall Street expectations, betting on surging demand for ​power management chips used in AI data centers.

SCOTTSDALE, Ariz., Aug. 03, 2026 (GLOBE NEWSWIRE) -- onsemi (the “Company”) (Nasdaq: ON) today announced its second quarter 2026 results with the following highlights:

Revenue of $1,604 million, increasing 9% year-over-yearGAAP gross margin of 38.4% and non-GAAP gross margin of 39.3%GAAP operating margin of 16.1% and non-GAAP operating margin 20.8%GAAP diluted earnings per share of $0.56 and non-GAAP diluted earnings per share $0.74Cash from operations increased by 150% and free cash flow of $425.4 million quadrupled year-over-yearShare repurchases of $332 million, bringing year-to-date shareholder returns to approximately 105% of free cash flow “We delivered revenue, gross margin and earnings per share above the midpoint of guidance, reflecting strengthening demand, particularly across AI-driven applications, and growing customer adoption of our differentiated solutions, including Treo and our high voltage power solutions,” said Hassane El-Khoury, President and CEO of onsemi. “AI data center remains our fastest-growing business, and we now expect revenue to more than double in 2026, demonstrating the strength of our intelligent power portfolio and growing customer adoption across the power tree.”

“Our results demonstrate the operating leverage in our business model,” said Thad Trent, EVP and CFO of onsemi. “Year-over-year earnings per share grew four times faster than revenue, driven by gross margin expansion and disciplined cost management. Free cash flow margin expanded from approximately 7% to 27% year-over-year, reflecting the strength of our operating model, and as demand continues to improve, we are increasingly confident in our ability to drive profitable growth and long-term shareholder value.”

Business Highlights:

Announced the planned acquisition of Synaptics, expanding capabilities in connected compute at accretive gross margins to support a market expansion while complementing leadership in power and sensingExpanded role in NVIDIA MGX ecosystem as AI infrastructure power demands accelerateSecured strategic AI data center platform wins with Great Wall, a leading China cloud infrastructure power supplier, expanding EliteSiC and silicon MOSFETs and controller contentLaunched ​​GaNEXUS​, onsemi's gallium nitride power portfolio spanning 40V to 650V, serving AI data centers, robotics, and industrial infrastructure applicationsExtended leadership in automotive zonal architecture and on-board charging with Rivian’s R2 platform with power solutions that enable efficient power distribution and conversion Selected financial results for the quarter are shown below with comparable periods (unaudited):

 GAAP Non-GAAP(Revenue and Net Income in millions)Q2 2026
 Q1 2026
 Q2 2025
  Q2 2026
 Q1 2026
 Q2 2025
 Revenue$1,603.5 $1,513.3 $1,468.7  $1,603.5 $1,513.3 $1,468.7 Gross Margin 38.4%  38.5%  37.6%   39.3%  38.5%  37.6% Operating Margin 16.1% (3.5)%  13.2%   20.8%  19.1%  17.3% Net Income (loss) attributable to ON Semiconductor Corporation$226.8 ($33.4) $170.3  $293.8 $253.1 $221.3 Diluted Earnings (loss) Per Share$0.56 ($0.08) $0.41  $0.74 $0.64 $0.53                      Revenue Summary
(in millions)
(Unaudited)
       Quarters Ended
   Business SegmentQ2 2026 Q1 2026 Q2 2025  Sequential
ChangeYear-over-
Year ChangePSG$829.0 $736.6 $698.2  13%19%AMG 545.7  540.4  555.9  1%(2)%ISG 228.8  236.3  214.6  (3)%7%Total$1,603.5 $1,513.3 $1,468.7  6%9%                THIRD QUARTER 2026 OUTLOOK

The following table outlines onsemi’s projected third quarter of 2026 GAAP and non-GAAP outlook.

 Total onsemi
GAAPSpecial
Items **Total onsemi
Non-GAAP***Revenue$1,650 to $1,750 million-$1,650 to $1,750 millionGross Margin39.9% to 41.9%0.1%40.0% to 42.0%Operating Expenses$318 to $333 million$15 million$303 to $318 millionOther Income and Expense (including interest), net($18 million)-($18 million)Diluted Earnings Per Share$0.79 to $0.91$0.02$0.81 to $0.93Diluted Shares Outstanding *402 million7 million395 million *Diluted shares outstanding can vary as a result of, among other things, the vesting of restricted stock units, the incremental dilutive shares from the convertible notes, and the repurchase or the issuance of stock or convertible notes or the sale of treasury shares. In periods when the quarterly average stock price per share exceeds $52.97 for the 0% Notes, $103.87 for the 0.50% Notes, and $161.30 for the 2031 0% Notes, the non-GAAP diluted share count and non-GAAP net income per share include the anti-dilutive impact of the hedge transactions entered concurrently with the 0% Notes, the 0.50% Notes, and the 2031 0% Notes, respectively. At an average stock price per share between $52.97 and $74.34 for the 0% Notes, $103.87 and $156.78 for the 0.50% Notes, and $161.30 and $211.54 for the 2031 0% Notes, the hedging activity offsets the potentially dilutive effect of the 0% Notes, the 0.50% Notes, and the 2031 0% Notes, respectively. In periods when the quarterly average stock price exceeds $74.34 for the 0% Notes, $156.78 for the 0.50% Notes, and $211.54 for the 2031 0% Notes, the dilutive impact of the warrants issued concurrently with such notes is included in the diluted shares outstanding. GAAP and non-GAAP diluted share counts are based on either the previous quarter's average stock price or the stock price as of the last day of the previous quarter, whichever is higher. **Special items may include: amortization of acquisition-related intangibles; expensing of appraised inventory fair market value step-up; restructuring-related cost of revenue charges; non-recurring facility costs; in-process research and development expenses; restructuring, asset impairments and other, net; goodwill impairment charges; gains and losses on debt prepayment; actuarial (gains) losses on pension plans and other pension benefits; and certain other special items, as necessary. These special items are out of our control and could change significantly from period to period. As a result, we are not able to reasonably estimate and separately present the individual impact or probable significance of these special items, and we are similarly unable to provide a reconciliation of the non-GAAP measures. The reconciliation that is unavailable would include a forward-looking income statement, balance sheet and statement of cash flows in accordance with GAAP. For this reason, we use a projected range of the aggregate amount of special items in order to calculate our projected non-GAAP operating expense outlook. ***We believe these non-GAAP measures provide important supplemental information to investors. We use these measures, together with GAAP measures, for internal managerial purposes and as a means to evaluate period-to-period comparisons. However, we do not, and you should not, rely on non-GAAP financial measures alone as measures of our performance. We believe that non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when taken together with GAAP results and the reconciliations to corresponding GAAP financial measures that we also provide in our releases, provide a more complete understanding of factors and trends affecting our business. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures, even if they have similar names.   TELECONFERENCE

onsemi will host a conference call for the financial community at 5 p.m. Eastern Time (ET) on August 3, 2026 to discuss this announcement and onsemi’s second quarter 2026 results. The Company will also provide a real-time audio webcast of the teleconference on the Investor Relations page of its website at http://www.onsemi.com. The webcast replay will be available at this site approximately one hour following the live broadcast and will continue to be available for approximately 30 days following the conference call. Investors and interested parties can also access the conference call by pre-registering here.

About onsemi

onsemi (Nasdaq: ON) delivers intelligent power and sensing technologies that enable electrification, energy efficiency, safety, and automation across automotive, industrial, and AI data center end-markets. With a highly differentiated and innovative product portfolio, onsemi helps customers solve complex challenges to achieve higher efficiency, improved performance, and lower system cost, while supporting a safer, cleaner, and more energy-efficient world. onsemi is part of the S&P 500® index. Learn more about onsemi at www.onsemi.com.

onsemi and the onsemi logo are trademarks of Semiconductor Components Industries, LLC. All other brand and product names appearing in this document are registered trademarks or trademarks of their respective holders. Although the Company references its website in this news release, information on the website is not to be incorporated herein.

Krystal HeatonParag AgarwalDirector, Head of Public RelationsVice President - Investor Relations & Corporate Developmentonsemionsemi(480) 242-6943(602) [email protected]@onsemi.com   This document includes “forward-looking statements,” as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included or incorporated in this document could be deemed forward-looking statements, particularly statements about the future financial performance of onsemi, including financial guidance for the third quarter of 2026. Forward-looking statements are often characterized by the use of words such as “believes,” “estimates,” “expects,” “projects,” “may,” “will,” “intends,” “plans,” “anticipates,” “should” or similar expressions or by discussions of strategy, plans or intentions. All forward-looking statements in this document are made based on our current expectations, forecasts, estimates and assumptions and involve risks, uncertainties and other factors that could cause results or events to differ materially from those expressed in the forward-looking statements. Certain factors that could affect our future results or events are described under Part I, Item 1A “Risk Factors” in the 2025 Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 9, 2026 (the “2025 Form 10-K”) and from time to time in our other SEC reports. Readers are cautioned not to place undue reliance on forward-looking statements. We assume no obligation to update such information, which speaks only as of the date made, except as may be required by law. Investing in our securities involves a high degree of risk and uncertainty, and you should carefully consider the trends, risks and uncertainties described in this document, our 2025 Form 10-K and other reports filed with or furnished to the SEC before making any investment decision with respect to our securities. If any of these trends, risks or uncertainties actually occurs or continues, our business, financial condition or operating results could be materially adversely affected, the trading prices of our securities could decline, and you could lose all or part of your investment. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this cautionary statement.

    ON SEMICONDUCTOR CORPORATIONUNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share and percentage data)

     Quarters Ended Six Months Ended July 3, 2026 April 3, 2026 July 4, 2025 July 3, 2026 July 4, 2025Revenue$1,603.5  $1,513.3  $1,468.7  $3,116.8  $2,914.4 Cost of revenue 987.2   930.2   916.8   1,917.4   2,068.7 Gross profit 616.3   583.1   551.9   1,199.4   845.7 Gross margin 38.4%  38.5%  37.6%  38.5%  29.0%Operating expenses:         Research and development 140.8   144.3   143.8   285.1   307.9 Selling and marketing 63.3   63.0   63.3   126.3   131.6 General and administrative 101.9   89.4   91.2   191.3   175.6 Amortization of intangible assets 10.5   10.5   11.0   21.0   22.4 Restructuring, asset impairments and other, net 41.2   329.3   49.2   370.5   588.5 Total operating expenses 357.7   636.5   358.5   994.2   1,226.0 Operating income (loss) 258.6   (53.4)  193.4   205.2   (380.3)Other income (expense), net:         Interest expense (13.7)  (12.7)  (17.9)  (26.4)  (35.9)Interest income 17.4   17.7   25.2   35.1   51.8 Other income 8.6   3.8   1.5   12.4   5.6 Other income (expense), net 12.3   8.8   8.8   21.1   21.5 Income (loss) before income taxes 270.9   (44.6)  202.2   226.3   (358.8)Income tax (provision) benefit (43.4)  11.7   (30.5)  (31.7)  45.3 Net income (loss) 227.5   (32.9)  171.7   194.6   (313.5)Less: Net income attributable to non-controlling interest (0.7)  (0.5)  (1.4)  (1.2)  (2.3)Net income (loss) attributable to ON Semiconductor Corporation$226.8  $(33.4) $170.3  $193.4  $(315.8)          Net income (loss) per share of common stock attributable to ON Semiconductor Corporation:         Basic$0.58  $(0.08) $0.41  $0.49  $(0.76)Diluted$0.56  $(0.08) $0.41  $0.48  $(0.76)Weighted average common shares outstanding:         Basic 390.3   394.1   414.6   392.2   418.0 Diluted 404.4   394.1   414.9   401.5   418.0                      ON SEMICONDUCTOR CORPORATIONUNAUDITED CONSOLIDATED BALANCE SHEETS

(in millions)

       July 3, 2026 April 3, 2026 December 31, 2025Assets     Cash and cash equivalents$3,514.5  $2,003.6  $2,147.6 Short-term investments 350.0   400.0   400.0 Receivables, net 897.2   862.8   908.0 Inventories 2,047.5   2,049.2   1,989.6 Assets held-for-sale 31.4   40.4   25.0 Other current assets 441.2   419.6   352.9 Total current assets 7,281.8   5,775.6   5,823.1 Property, plant and equipment, net 2,924.9   3,035.6   3,369.0 Goodwill 1,687.6   1,679.9   1,679.9 Intangible assets, net 329.4   332.2   343.9 Deferred tax assets 1,014.3   933.2   929.1 ROU financing lease assets —   —   23.1 Other assets 247.1   254.3   356.0 Total assets$13,485.1  $12,010.8  $12,524.1 Liabilities and Stockholders’ Equity     Accounts payable$498.3  $486.1  $572.3 Accrued expenses and other current liabilities 801.0   698.7   714.9 Current portion of financing lease liabilities 0.5   0.5   0.5 Current portion of long-term debt 802.1   —   — Total current liabilities 2,101.9   1,185.3   1,287.7 Long-term debt 3,657.3   2,982.9   2,980.5 Deferred tax liabilities 46.8   46.5   41.7 Long-term financing lease liabilities 22.8   23.1   23.8 Other long-term liabilities 417.8   452.2   498.5 Total liabilities 6,246.6   4,690.0   4,832.2 ON Semiconductor Corporation stockholders’ equity:     Common stock 6.3   6.3   6.2 Additional paid-in capital 5,632.8   5,582.5   5,538.6 Accumulated other comprehensive loss (67.1)  (61.7)  (55.5)Accumulated earnings 8,435.3   8,208.5   8,241.9 Less: Treasury stock, at cost (6,788.6)  (6,433.9)  (6,057.9)Total ON Semiconductor Corporation stockholders’ equity 7,218.7   7,301.7   7,673.3 Non-controlling interest 19.8   19.1   18.6 Total stockholders’ equity 7,238.5   7,320.8   7,691.9 Total liabilities and stockholders’ equity$13,485.1  $12,010.8  $12,524.1                                   Quarters Ended Six Months Ended July 3, 2026 April 3, 2026 July 4, 2025 July 3, 2026 July 4, 2025Cash flows from operating activities:         Net income (loss)$227.5  $(32.9) $171.7  $194.6  $(313.5)Adjustments to reconcile net income (loss) to net cash provided by operating activities:         Depreciation and amortization 141.3   286.7   156.4   428.0   324.6 Gain on sale and disposal of fixed assets (0.3)  (1.1)  (5.8)  (1.4)  (5.8)Amortization of debt discount and issuance costs 3.8   2.9   2.8   6.7   5.7 Share-based compensation 37.4   37.3   34.4   74.7   68.3 Non-cash asset impairment charges 16.3   147.0   40.6   163.3   472.1 Change in deferred tax balances (12.8)  2.7   (18.5)  (10.1)  (32.2)Other 1.9   (2.2)  2.5   (0.3)  4.3 Changes in assets and liabilities 44.6   (201.3)  (199.8)  (156.7)  263.1 Net cash provided by operating activities 459.7   239.1   184.3   698.8   786.6 Cash flows from investing activities:         Payments for acquisition of property, plant, and equipment (34.3)  (21.9)  (78.2)  (56.2)  (225.8)Proceeds from sale of property, plant and equipment 7.6   1.0   6.5   8.6   6.7 Purchase of short-term investments (350.0)  (300.0)  (300.0)  (650.0)  (550.0)Proceeds from the maturity of short-term investments 400.0   300.0   250.0   700.0   550.0 Payments for acquisition of a business, net of cash acquired (13.0)  —   —   (13.0)  (117.5)Other (3.0)  4.2   —   1.2   — Net cash provided by (used in) investing activities 7.3   (16.7)  (121.7)  (9.4)  (336.6)Cash flows from financing activities:         Proceeds for common stock issuance under the ESPP 5.3   6.7   5.3   12.0   10.6 Payment of tax withholding for RSUs (18.6)  (26.9)  (2.7)  (45.5)  (25.1)Repurchase of common stock (344.8)  (345.7)  (302.3)  (690.5)  (602.4)Issuance and borrowings under debt agreements 1,473.7   —   —   1,473.7   — Reimbursement of debt issuance and other financing costs 3.4   —   —   3.4   — Payment of debt issuance and other financing costs (4.2)  —   —   (4.2)  — Payment for purchase of bond hedges (351.6)  —   —   (351.6)  — Proceeds from issuance of warrants 281.0   —   —   281.0   — Payment of finance lease obligations (0.1)  (0.1)  (0.4)  (0.2)  (0.8)Net cash provided by (used in) financing activities 1,044.1   (366.0)  (300.1)  678.1   (617.7)Effect of exchange rate changes on cash, cash equivalents and restricted cash (0.3)  (0.3)  1.9   (0.6)  3.9 Net increase (decrease) in cash, cash equivalents and restricted cash 1,510.8   (143.9)  (235.6)  1,366.9   (163.8)Beginning cash, cash equivalents and restricted cash 2,005.1   2,149.0   2,765.2   2,149.0   2,693.4 Ending cash, cash equivalents and restricted cash$3,515.9  $2,005.1  $2,529.6  $3,515.9  $2,529.6                         Quarters Ended Six Months Ended   July 3, 2026 April 3, 2026 July 4, 2025 July 3, 2026 July 4, 2025Reconciliation of GAAP to non-GAAP gross profit:         GAAP gross profit$616.3  $583.1  $551.9  $1,199.4  $845.7  Special items:          a)Restructuring-related inventory and other charges 13.4   (1.0)  (1.9)  12.4   281.5  b)Amortization of intangible assets 1.2   1.2   1.3   2.4   2.6  c)Amortization of fair market value step-up of inventory —   —   1.2   —   1.2   Total special items 14.6   0.2   0.6   14.8   285.3 Non-GAAP gross profit$630.9  $583.3  $552.5  $1,214.2  $1,131.0 Reconciliation of GAAP to non-GAAP gross margin:         GAAP gross margin 38.4%  38.5%  37.6%  38.5%  29.0% Special items:          a)Restructuring-related inventory and other charges 0.8% (0.1)% (0.1)%  0.4%  9.7% b)Amortization of intangible assets 0.1%  0.1%  0.1%  0.1%  0.1% c)Amortization of fair market value step-up of inventory —%  —%  0.1%  —%  —%  Total special items 0.9%  —%  0.1%  0.5%  9.8%Non-GAAP gross margin 39.3%  38.5%  37.6%  39.0%  38.8%Reconciliation of GAAP to non-GAAP operating expenses:         GAAP operating expenses$357.7  $636.5  $358.5  $994.2  $1,226.0  Special items:          a)Amortization of intangible assets (10.5)  (10.5)  (11.0)  (21.0)  (22.4) b)Restructuring, asset impairments and other charges, net (41.2)  (329.3)  (49.2)  (370.5)  (588.5) c)Third-party acquisition and divestiture-related costs (7.6)  (1.4)  (0.6)  (9.0)  (2.9) d)Adjustments to contingent consideration (1.6)  (1.6)  —   (3.2)  —   Total special items (60.9)  (342.8)  (60.8)  (403.7)  (613.8)Non-GAAP operating expenses$296.8  $293.7  $297.7  $590.5  $612.2 Reconciliation of GAAP to non-GAAP operating income:         GAAP operating income (loss)$258.6  $(53.4) $193.4  $205.2  $(380.3) Special items:          a)Restructuring-related inventory and other charges 13.4   (1.0)  (1.9)  12.4   281.5  b)Amortization of intangible assets 11.7   11.7   12.3   23.4   25.0  c)Restructuring, asset impairments and other charges, net 41.2   329.3   49.2   370.5   588.5  d)Third-party acquisition and divestiture-related costs 7.6   1.4   0.6   9.0   2.9  e)Amortization of fair market value step-up of inventory —   —   1.2   —   1.2  f)Adjustments to contingent consideration 1.6   1.6   —   3.2   —   Total special items 75.5   343.0   61.4   418.5   899.1 Non-GAAP operating income$334.1  $289.6  $254.8  $623.7  $518.8 Reconciliation of GAAP to non-GAAP operating margin(operating income / revenue):         GAAP operating margin 16.1% (3.5)%  13.2%  6.6% (13.0)% Special items:          a)Restructuring related inventory and other charges 0.8% (0.1)% (0.1)%  0.4%  9.7% b)Amortization of intangible assets 0.7%  0.8%  0.8%  0.8%  0.9% c)Restructuring, asset impairments and other charges, net 2.6%  21.8%  3.3%  11.9%  20.2% d)Third-party acquisition and divestiture-related costs 0.5%  0.1%  —%  0.3%  0.1% e)Amortization of fair market value step-up of inventory —%  —%  0.1%  —%  —% f)Adjustments to contingent consideration 0.1%  0.1%  —%  0.1%  —%  Total special items 4.7%  22.7%  4.1%  13.5%  30.9%Non-GAAP operating margin 20.8%  19.1%  17.3%  20.0%  17.8%Reconciliation of GAAP to non-GAAP income before income taxes:         GAAP income (loss) before income taxes$270.9  $(44.6) $202.2  $226.3  $(358.8) Special items:          a)Restructuring-related inventory and other charges 13.4   (1.0)  (1.9)  12.4   281.5  b)Amortization of intangible assets 11.7   11.7   12.3   23.4   25.0  c)Restructuring, asset impairments and other charges, net 41.2   329.3   49.2   370.5   588.5  d)Third-party acquisition and divestiture-related costs 7.6   1.4   0.6   9.0   2.9  e)Amortization of fair market value step-up of inventory —   —   1.2   —   1.2  f)Adjustments to contingent consideration 1.6   1.6   —   3.2   —   Total special items 75.5   343.0   61.4   418.5   899.1 Non-GAAP income before income taxes$346.4  $298.4  $263.6  $644.8  $540.3 Reconciliation of GAAP to non-GAAP net income attributable to ON Semiconductor Corporation:         GAAP net income (loss) attributable to ON Semiconductor Corporation$226.8  $(33.4) $170.3  $193.4  $(315.8) Special items:          a)Restructuring-related inventory and other charges 13.4   (1.0)  (1.9)  12.4   281.5  b)Amortization of intangible assets 11.7   11.7   12.3   23.4   25.0  c)Restructuring, asset impairments and other charges, net 41.2   329.3   49.2   370.5   588.5  d)Third-party acquisition and divestiture-related costs 7.6   1.4   0.6   9.0   2.9  e)Amortization of fair market value step-up of inventory —   —   1.2   —   1.2  f)Adjustments to contingent consideration 1.6   1.6   —   3.2   —  g)Adjustment to Income taxes (8.5)  (56.5)  (10.4)  (65.0)  (130.4)  Total special items 67.0   286.5   51.0   353.5   768.7 Non-GAAP net income attributable to ON Semiconductor Corporation$293.8  $253.1  $221.3  $546.9  $452.9 Reconciliation of GAAP to non-GAAP diluted shares outstanding:         GAAP diluted shares outstanding 404.4   394.1   414.9   401.5   418.0  Special items:          a)Less: dilutive shares attributable to convertible notes (7.4)  —   —   (4.9)  —  b)Add: dilutive shares attributable to share-based awards —   1.9   —   —   0.4   Total special items (7.4)  1.9   —   (4.9)  0.4 Non-GAAP diluted shares outstanding 397.0   396.0   414.9   396.6   418.4 Non-GAAP diluted earnings per share:         Non-GAAP net income attributable to ON Semiconductor Corporation$293.8  $253.1  $221.3  $546.9  $452.9 Non-GAAP diluted shares outstanding 397.0   396.0   414.9   396.6   418.4 Non-GAAP diluted earnings per share$0.74  $0.64  $0.53  $1.38  $1.08 Reconciliation of net cash provided by operating activities to free cash flow:         Net cash provided by operating activities$459.7  $239.1  $184.3  $698.8  $786.6  Special items:          a)Payments for acquisition of property, plant and equipment (34.3)  (21.9)  (78.2)  (56.2)  (225.8)  Total special items (34.3)  (21.9)  (78.2)  (56.2)  (225.8)Free cash flow$425.4  $217.2  $106.1  $642.6  $560.8                      Certain of the amounts in the above tables may not total due to rounding of individual amounts.

FREE CASH FLOW

 Quarters Ended   October 3, 2025 December 31, 2025 April 3, 2026 July 3, 2026 Last Twelve MonthsNet cash provided by operating activities$418.7  $554.5  $239.1  $459.7  $1,672.0 Payments for acquisition of property, plant and equipment (46.3)  (69.1)  (21.9)  (34.3)  (171.6)Free cash flow$372.4  $485.4  $217.2  $425.4  $1,500.4           Revenue$1,550.9  $1,530.1  $1,513.3  $1,603.5  $6,197.8                      SHARE-BASED COMPENSATION

Total share-based compensation related to restricted stock units, stock grant awards and the employee stock purchase plan was as follows:

 Quarters Ended
 Six Months Ended
 July 3, 2026
 April 3, 2026
 July 4, 2025
 July 3, 2026
 July 4, 2025
Cost of revenue$6.8  $6.4  $6.1  $13.2  $12.1 Research and development 6.0   7.3   6.3   13.3   12.6 Selling and marketing 4.8   5.1   4.9   9.9   9.6 General and administrative 19.8   18.5   17.1   38.3   34.0 Total share-based compensation$37.4  $37.3  $34.4  $74.7  $68.3                      SUPPLEMENTAL FINANCIAL DATA

 Quarters Ended
 Six Months Ended
 July 3, 2026
 April 3, 2026
 July 4, 2025
 July 3, 2026
 July 4, 2025
Net cash provided by operating activities$459.7  $239.1  $184.3  $698.8  $786.6 Free cash flow$425.4  $217.2  $106.1  $642.6  $560.8 Cash paid for income taxes$50.8  $46.6  $65.0  $97.4  $86.5                Depreciation and amortization (1)$141.3  $286.7  $156.4  $428.0  $324.6 Less: Amortization of intangible assets 11.7   11.7   12.3   23.4   25.0 Depreciation and amortization (excl. amortization of intangible assets) (1)$129.6  $275.0  $144.1  $404.6  $299.6                (1) Accelerated depreciation and amortization related to the 2025 and 2026 Manufacturing Realignment Programs$—  $136.5  $2.0  $136.5  $14.5                      To supplement the consolidated financial results prepared in accordance with GAAP, onsemi uses certain non-GAAP measures, which are adjusted from the most directly comparable GAAP measures to exclude items related to the amortization of acquisition-related intangibles, restructuring-related cost of revenue charges, expensing of appraised inventory fair market value step-up, inventory valuation adjustments, in-process research and development expenses, restructuring, asset impairments and other, net, goodwill impairment charges, gains and losses on debt prepayment, non-cash interest expense, actuarial (gains) losses on pension plans and other pension benefits, third party acquisition and divestiture-related costs, tax impact of these items and certain other non-recurring items, as necessary. Management does not consider the effects of these items in evaluating the core operational activities of onsemi. Management uses these non-GAAP measures internally to make strategic decisions, forecast future results and evaluate onsemi’s current performance. In addition, the Company believes that most analysts covering onsemi use the non-GAAP measures to evaluate onsemi’s performance. Given management’s and other relevant parties’ use of these non-GAAP measures, onsemi believes these measures are important to investors in understanding onsemi’s current and future operating results as seen through the eyes of management. In addition, management believes these non-GAAP measures are useful to investors in enabling them to better assess changes in onsemi’s core business across different time periods. These non-GAAP measures are not prepared in accordance with, and should not be considered alternatives or necessarily superior to, GAAP financial data and may be different from non-GAAP measures used by other companies. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures, even if they have similar names.

Non-GAAP Gross Profit and Gross Margin

The use of non-GAAP gross profit and gross margin allows management to evaluate, among other things, the gross profit and gross margin of the Company’s core businesses and trends across different reporting periods on a consistent basis, independent of non-cash and non-recurring items including, generally speaking, restructuring-related cost of revenue charges, amortization of intangible assets, amortization of appraised inventory fair market value step-up, impact of business wind down and non-recurring facility costs. In addition, it is an important component of management’s internal performance measurement and incentive and reward process as it is used to assess the current and historical financial results of the business and for strategic decision making, preparing budgets, obtaining targets and forecasting future results. Management presents this non-GAAP financial measure to enable investors and analysts to evaluate our operating performance independent of certain non-cash items and the effects of certain variables unrelated to our overall operating performance.

Non-GAAP Operating Income and Operating Margin

The use of non-GAAP operating income and operating margin allows management to evaluate, among other things, the operating income and operating margin of the Company’s core businesses and trends across different reporting periods on a consistent basis, independent of non-cash and non-recurring items including, generally speaking, restructuring-related cost of revenue charges, expensing of appraised inventory fair market value step-up, impact of business wind down, non-recurring facility costs, amortization and impairments of intangible assets, third party acquisition and divestiture-related costs, restructuring charges, asset impairments and certain other special items as necessary. In addition, it is an important component of management’s internal performance measurement and incentive and reward process as it is used to assess the current and historical financial results of the business and for strategic decision making, preparing budgets, obtaining targets and forecasting future results. Management presents this non-GAAP financial measure to enable investors and analysts to evaluate our operating performance independent of certain non-cash items and the effects of certain variables unrelated to our overall operating performance.

Non-GAAP Net Income Attributable to ON Semiconductor Corporation and Non-GAAP Diluted Earnings Per Share

The use of non-GAAP net income attributable to ON Semiconductor Corporation and non-GAAP diluted earnings per share allows management to evaluate the operating results of onsemi’s core businesses and trends across different reporting periods on a consistent basis, independent of non-cash and non-recurring items including, generally, the restructuring related cost of revenue charges, amortization and impairments of intangible assets, expensing of appraised inventory fair market value step-up, impact of business wind down, non-recurring facility costs, restructuring, asset impairments, gains and losses on debt prepayment, actuarial (gains) losses on pension plans and other pension benefits, third party acquisition and divestiture-related costs, discrete tax items and other non-GAAP tax adjustments and certain other special items, as necessary. In addition, these measures are important components of management’s internal performance measurement and incentive and reward process, as they are used to assess the current and historical financial results of the business and for strategic decision making, preparing budgets, setting targets and forecasting future results. For our non-GAAP reporting we apply a projected, normalized non-GAAP effective tax rate of 15% for 2026 and 16% for 2025. We calculate this non-GAAP effective tax rate on an annual basis. We may update this non-GAAP effective tax rate at any time for a variety of reasons, including, but not limited to, the rapidly evolving global tax environment, significant changes in our geographic earnings mix or changes to our strategy or business operations. Management presents these non-GAAP financial measures to enable investors and analysts to understand the results of operations of onsemi’s core businesses and, to the extent comparable, to compare our results of operations on a more consistent basis against those of other companies in our industry.

Free Cash Flow

The use of free cash flow allows management to evaluate, among other things, the ability of the Company to make interest or principal payments on its debt. Free cash flow is defined as the difference between cash flow from operating activities and capital expenditures disclosed under investing activities in the consolidated statement of cash flows. Free cash flow is not an alternative to cash flow from operating activities as a measure of liquidity. It is an important component of management’s internal performance measurement and incentive and reward process as it is used to assess the current and historical financial results of the business and for strategic decision making, preparing budgets, obtaining targets and forecasting future results. Management presents this non-GAAP financial measure to enable investors and analysts to evaluate our financial performance independent of the cash capital expenditures.

Non-GAAP Diluted Share Count

The use of non-GAAP diluted share count allows management to evaluate, among other things, the potential dilution due to the outstanding restricted stock units excluding the dilution from the convertible notes that is covered by hedging activity up to a certain threshold. In periods when the quarterly average stock price per share exceeds $52.97 for the 0% Notes, $103.87 for the 0.50% Notes, and $161.30 for the 2031 0% Notes, the non-GAAP diluted share count includes the anti-dilutive impact of the Company’s hedge transactions issued concurrently with the 0% Notes, the 0.50% Notes, and the 2031 0% Notes, respectively. At an average stock price per share between $52.97 and $74.34 for the 0% Notes, $103.87 and $156.78 for the 0.50% Notes, and $161.30 and $211.54 for the 2031 0% Notes, the hedging activity offsets the potentially dilutive effect of the 0% Notes, the 0.50% Notes, and the 2031 0% Notes, respectively. In periods when the quarterly average stock price exceeds $74.34 for the 0% Notes, $156.78 for the 0.50% Notes, and $211.54 for the 2031 0% Notes, the dilutive impact of the warrants issued concurrently with such notes is included in the diluted shares outstanding.

Onsemi (ON) is set to report 2Q earnings after the bell. Rick Ducat discusses the technical trends taking shape in the semiconductor stock prior to its release.

ON's improving auto and industrial demand, AI power growth and Fab Right gains support Q2, but weak EV markets and premium valuation warrant caution.

, /PRNewswire/ -- Pomerantz LLP is investigating claims on behalf of investors of ON Semiconductor Corporation ("Onsemi" or the "Company") (NASDAQ: ON). Such investors are advised to contact Danielle Peyton at [email protected] or 646-581-9980, ext. 7980.

The investigation concerns whether Onsemi and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices. 

[Click here for information about joining the class action]

On June 25, 2026, Onsemi announced an agreement to buy the internet-of-things company Synaptics Incorporated ("Synaptics") in an all-stock transaction.  Pursuant to the terms of the agreement, Synaptics shareholders will receive 1.35 shares of Onsemi stock for each Synaptics share, representing an enterprise value of around $7 billion. 

Following announcement of the agreement, Onsemi's stock price fell $28.09 per share, or 23.66%, to close at $90.65 per share on June 26, 2026.

Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com.

Attorney advertising. Prior results do not guarantee similar outcomes.

CONTACT:
Danielle Peyton
Pomerantz LLP
[email protected]
646-581-9980 ext. 7980

SOURCE Pomerantz LLP

NEW YORK, July 21, 2026 (GLOBE NEWSWIRE) -- Pomerantz LLP is investigating claims on behalf of investors of ON Semiconductor Corporation (“Onsemi” or the “Company”) (NASDAQ: ON). Such investors are advised to contact Danielle Peyton at [email protected] or 646-581-9980, ext. 7980.

The investigation concerns whether Onsemi and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices. 

[Click here for information about joining the class action]

On June 25, 2026, Onsemi announced an agreement to buy the internet-of-things company Synaptics Incorporated (“Synaptics”) in an all-stock transaction. Pursuant to the terms of the agreement, Synaptics shareholders will receive 1.35 shares of Onsemi stock for each Synaptics share, representing an enterprise value of around $7 billion. 

Following announcement of the agreement, Onsemi’s stock price fell $28.09 per share, or 23.66%, to close at $90.65 per share on June 26, 2026.

Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com.

Attorney advertising. Prior results do not guarantee similar outcomes.

CONTACT:
Danielle Peyton
Pomerantz LLP
[email protected]
646-581-9980 ext. 7980

, /PRNewswire/ -- Pomerantz LLP is investigating claims on behalf of investors of ON Semiconductor Corporation ("Onsemi" or the "Company") (NASDAQ: ON). Such investors are advised to contact Danielle Peyton at [email protected] or 646-581-9980, ext. 7980.

The investigation concerns whether Onsemi and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices. 

[Click here for information about joining the class action]

On June 25, 2026, Onsemi announced an agreement to buy the internet-of-things company Synaptics Incorporated ("Synaptics") in an all-stock transaction.  Pursuant to the terms of the agreement, Synaptics shareholders will receive 1.35 shares of Onsemi stock for each Synaptics share, representing an enterprise value of around $7 billion. 

Following announcement of the agreement, Onsemi's stock price fell $28.09 per share, or 23.66%, to close at $90.65 per share on June 26, 2026.

Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com.

Attorney advertising. Prior results do not guarantee similar outcomes. 

CONTACT:
Danielle Peyton
Pomerantz LLP
[email protected]
646-581-9980 ext. 7980

SOURCE Pomerantz LLP

Wall Street watches a company's quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings.

We know earnings results are vital, but how a company performs compared to bottom line expectations can be even more important when it comes to stock prices, especially in the near-term. This means that investors might want to take advantage of these earnings surprises.

The ability to identify stocks that are likely to top quarterly earnings expectations can be profitable, but it's no simple task. Here at Zacks, our Earnings ESP filter helps make things easier.

The Zacks Earnings ESP, ExplainedThe Zacks Earnings ESP, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate.

Now that we understand the basic idea, let's look at how the Expected Surprise Prediction works. The ESP is calculated by comparing the Most Accurate Estimate to the Zacks Consensus Estimate, with the percentage difference between the two giving us the Zacks ESP figure.

In fact, when we combined a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time. Perhaps most importantly, using these parameters has helped produce 28.3% annual returns on average, according to our 10 year backtest.

Most stocks, about 60%, fall into the #3 (Hold) category, and they are expected to perform in-line with the broader market. Stocks with a #2 (Buy) and #1 (Strong Buy) rating, or the top 15% and top 5% of stocks, respectively, should outperform the market, with Strong Buy stocks outperforming more than any other rank.

Should You Consider Applied Materials?The last thing we will do today, now that we have a grasp on the ESP and how powerful of a tool it can be, is to quickly look at a qualifying stock. Applied Materials (AMAT - Free Report) holds a #1 (Strong Buy) at the moment and its Most Accurate Estimate comes in at $3.41 a share 28 days away from its upcoming earnings release on August 13, 2026.

Applied Materials' Earnings ESP sits at +1.52%, which, as explained above, is calculated by taking the percentage difference between the $3.41 Most Accurate Estimate and the Zacks Consensus Estimate of $3.36. AMAT is also part of a large group of stocks that boast a positive ESP. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

AMAT is part of a big group of Computer and Technology stocks that boast a positive ESP, and investors may want to take a look at ON Semiconductor Corp. (ON - Free Report) as well.

ON Semiconductor Corp. is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on August 3, 2026. ON's Most Accurate Estimate sits at $0.73 a share 18 days from its next earnings release.

ON Semiconductor Corp.'s Earnings ESP figure currently stands at +2.11% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.71.

Because both stocks hold a positive Earnings ESP, AMAT and ON could potentially post earnings beats in their next reports.

Find Stocks to Buy or Sell Before They're ReportedUse the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>

onsemi's 67% YTD rally reflects AI growth and portfolio gains, but auto volatility, competition and valuation may cap near-term upside.

, /PRNewswire/ -- Pomerantz LLP is investigating claims on behalf of investors of ON Semiconductor Corporation ("Onsemi" or the "Company") (NASDAQ: ON).  Such investors are advised to contact Danielle Peyton at [email protected] or 646-581-9980, ext. 7980.

The investigation concerns whether Onsemi and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices. 

[Click here for information about joining the class action]

On June 25, 2026, Onsemi announced an agreement to buy the internet-of-things company Synaptics Incorporated ("Synaptics") in an all-stock transaction.  Pursuant to the terms of the agreement, Synaptics shareholders will receive 1.35 shares of Onsemi stock for each Synaptics share, representing an enterprise value of around $7 billion. 

Following announcement of the agreement, Onsemi's stock price fell $28.09 per share, or 23.66%, to close at $90.65 per share on June 26, 2026.

Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com.

Attorney advertising. Prior results do not guarantee similar outcomes. 

CONTACT:
Danielle Peyton
Pomerantz LLP
[email protected]
646-581-9980 ext. 7980

SOURCE Pomerantz LLP

Onsemi (NASDAQ:ON)'s proposed acquisition of Synaptics could create long-term strategic benefits, with Bank of America writing that a meeting with management increased its confidence in the rationale and potential synergies of the transaction.

The analysts wrote that Synaptics adds highly complementary compute assets to Onsemi (NASDAQ:ON)’s existing strengths in power, sensing and control, supporting the company’s ambition to build a complete edge AI portfolio.

They wrote that acquiring these capabilities through M&A allows Onsemi to accelerate time to market while avoiding the distraction of developing them internally.

Bank of America wrote that the market underappreciates the potential long-term benefits of the transaction, noting that initial cost synergy assumptions of $200 million could underestimate the ultimate savings potential. The analysts added that revenue synergies could also be significant over time as Onsemi cross-sells Synaptics products through its distribution channel.

The analysts wrote that the all-stock transaction preserves Onsemi’s balance sheet flexibility to fund buybacks and invest in new products, including Synaptics’ Astra program. They added that the deal could provide solid EPS accretion above the $7 in long-term EPS power they see for core Onsemi.

Bank of America also highlighted an expanded market opportunity, writing that Onsemi now believes the total addressable market for its core business exceeds $200 billion, compared with $64 billion at its previous analyst day, while Synaptics adds an additional $30 billion.

The analysts wrote that Synaptics’ consumer and enterprise PC exposure could be viewed negatively by investors but noted that these businesses generate gross margins in the high-50% range, above Onsemi’s typical high-40% gross margins.

On artificial intelligence opportunities, Bank of America wrote that Onsemi’s AI data center business is on track to at least double in 2026 from $250 million in 2025. The analysts highlighted the company’s vertical gallium nitride technology, writing that it is differentiated as the only device supporting high frequency and high voltages in a single chip.

The analysts wrote that Onsemi’s core initiatives remain on track, including progress in automotive silicon carbide for China electric vehicles, ethernet and zonal architecture, while industrial segments are recovering as purchasing managers’ indexes move above 50. They also noted that the recent exit of two facilities represents 50 basis points of a targeted 200 basis points of gross margin expansion from Onsemi’s fab restructuring initiatives.

Bank of America maintained its ‘Buy’ rating, writing that Onsemi’s upcoming analyst day could serve as a catalyst.

Shares of Onsemi traded up more than 5% on Thursday afternoon amid a broader rally in chipmaker stocks.

Key Takeaways MU signed long-term Ford and GM deals as vehicles require more memory and storage content.ON and NXPI are positioned for demand tied to EV powertrains and software-defined vehicles.NVDA is expanding DRIVE partnerships for ADAS and Level 4 autonomous driving applications. Vehicles are becoming increasingly software-defined, requiring far more semiconductors than previous generations. Autonomous driving, electrification, connected features, digital cockpits and zonal vehicle architectures are driving demand for memory, AI processors, sensors, networking chips and power semiconductors. Micron Technology (MU - Free Report) identifies these as five key megatrends reshaping the automotive industry.

These trends are prompting automakers to secure access to critical chip technologies. Recently, Micron signed a long-term agreement with Ford to supply memory and storage solutions for the automaker's future vehicles. The announcement came just days after Micron secured a similar agreement with General Motors. According to Micron CEO Sanjay Mehrotra, vehicles with Level 4 autonomous driving capabilities could eventually require more than 300GB of RAM, pointing to a significant increase in memory content per vehicle.

AI-powered vehicles also require powerful processors to run complex software, image sensors and radar chips to enable advanced safety features and efficient power semiconductors to manage rising computing workloads. As the automotive industry evolves, several semiconductor companies like Micron, ON Semiconductor (ON - Free Report) , NXP Semiconductors N.V. (NXPI - Free Report) , and NVIDIA (NVDA - Free Report) are well-positioned to benefit fromthis shift to the next generation of intelligent vehicles.

MicronMicron is becoming a strategic technology partner for automakers. Under its agreements with Ford and General Motors, the company will provide automotive-grade LPDRAM, NOR flash and UFS NAND storage products while working with customers on future memory platforms and vehicle architectures. This deeper collaboration should strengthen Micron's position as vehicles become increasingly software-defined.

To support long-term demand, Micron is expanding advanced DRAM manufacturing at its Manassas, VA, facility and increasing output of automotive memory solutions designed for long product lifecycles. These investments should improve supply reliability while helping the company capture rising memory content per vehicle. As ADAS, connected features and AV capabilities become more widespread, Micron's growing automotive footprint positions it to benefit from a multi-year increase in demand for high-performance automotive memory and storage.

MU currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

onsemionsemi is benefiting from electrification and software-defined vehicles. The company is a leading supplier of silicon carbide (SiC) power semiconductors, which are increasingly used in EV powertrains to improve energy efficiency, charging speed and driving range. Partnerships with automakers such as Geely and NIO continue to strengthen its presence in the world's largest EV market.

Beyond power chips, onsemi is expanding its role in next-generation vehicle architectures. Its Treo platform is gaining traction in software-defined vehicles, and the company recently began production shipments of Ethernet solutions for a North American automaker's zonal architecture. These chips enable faster in-vehicle communication and centralized computing—key building blocks for connected and autonomous vehicles. As adoption of zonal architectures accelerates, ON appears well-positioned to capture both revenue growth and higher-margin opportunities.

onsemi carries a Zacks Rank #3 (Hold).

NXP SemiconductorsNXP Semiconductors is benefiting from the automotive industry's shift toward software-defined vehicles and centralized computing architectures. The company is seeing rising demand for its S32 processing platforms, automotive Ethernet solutions and imaging radar chips, which enable advanced driver-assistance systems, high-speed in-vehicle communication and real-time data processing.

These next-generation platforms are increasing NXP's semiconductor content per vehicle, allowing the company to capture a larger share of automotive electronics as vehicles become more intelligent. At the same time, deeper engagement in long-term vehicle programs is strengthening relationships with global automakers and improving future revenue visibility. NXP is also gaining traction in China, where rapid adoption of advanced vehicle architectures is creating additional demand for its automotive processors, networking and connectivity solutions. With software-defined vehicles becoming mainstream, NXP appears well-positioned to benefit.

NXP Semiconductors carries a Zacks Rank #3.

NVIDIANVIDIA is becoming a key technology partner for automakers developing AI-powered and AVs. General Motors has collaborated with NVIDIA to use the company's AI technology for next-generation vehicles and manufacturing, while the automaker will also build future vehicles on NVIDIA's DRIVE AGX platform to accelerate the deployment of autonomous driving capabilities. NVIDIA has also deepened ties with Stellantis, Hyundai Motor and Kia, supplying its DRIVE platform and DRIVE AV software for advanced driver-assistance and Level 4 autonomous driving applications.

These partnerships reinforce NVIDIA's growing role beyond AI data centers. Its DRIVE platform integrates AI computing, perception and autonomous driving software into a single architecture, enabling automakers to build software-defined vehicles with advanced safety and connectivity features. As autonomous driving and in-vehicle AI become more mainstream, NVIDIA is well-positioned to capture a larger share of automotive semiconductor spending.

NVIDIA carries a Zacks Rank #3.

SCOTTSDALE, Ariz., July 07, 2026 (GLOBE NEWSWIRE) -- onsemi (Nasdaq: ON) today announced it has entered into definitive agreements to divest two manufacturing facilities. These planned divestitures are part of onsemi’s ongoing initiative to improve companywide manufacturing cost structure to drive sustained gross margin expansion as part of its Fab Right strategy.

onsemi’s Fab Right manufacturing strategy focuses on continuous optimization of manufacturing footprint and directs resources to the most competitive, scalable and technology-aligned operations across its global manufacturing footprint. This approach is designed to improve the company’s long-term cost structure and strengthen overall competitiveness by enabling a highly efficient manufacturing network.

Tarlac, Philippines
onsemi has entered into an agreement with Greatek Electronics Inc., a Taiwan-based semiconductor company specializing in integrated circuit packaging and testing services. The transaction is expected to close within the next three to six months, subject to customary closing conditions and regulatory approvals.

The Tarlac site will continue operating as part of onsemi’s manufacturing network throughout the transition period. The companies have established a long-term supply agreement to support ongoing production and ensure continuity for customer commitments following the close of the transaction.

Mountain Top, Pennsylvania
onsemi has also entered into an agreement with Silex Microsystems, a Sweden-based semiconductor company. The transaction is expected to close in January 2028, subject to customary closing conditions and regulatory approvals.

The extended transition period is intended to allow onsemi to continue an orderly transfer of the products currently manufactured at the site to other facilities within its network, ensuring continuity for customers and a structured migration of technologies.

These actions are expected to result in cost savings of approximately $35 million per year, with initial savings starting in 2027 and the full savings realized in 2028. This represents an important step in shaping a more focused and efficient manufacturing network. By aligning its footprint to long-term strategic priorities, onsemi is strengthening its ability to deliver sustained value to customers and stakeholders.

About onsemi 

onsemi (Nasdaq: ON) delivers intelligent power and sensing technologies that enable electrification, energy efficiency, safety, and automation across automotive, industrial, and AI data center end-markets. With a highly differentiated and innovative product portfolio, onsemi helps customers solve complex challenges to achieve higher efficiency, improved performance, and lower system cost, while supporting a safer, cleaner, and more energy‑efficient world. The company is part of the S&P 500® index. Learn more at www.onsemi.com.

onsemi and the onsemi logo are trademarks of Semiconductor Components Industries, LLC. All other brand and product names appearing in this document are registered trademarks or trademarks of their respective holders.  

Caution Regarding Forward-Looking Statements:

This press release includes “forward-looking statements,” as that term is defined in Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included or incorporated in this press release could be deemed forward-looking statements, particularly statements about the proposed divestitures, their impact on onsemi’s manufacturing cost structure and, more broadly, the impact of onsemi’s Fab Right strategy on its operating results and financial condition. Forward-looking statements are often characterized by the use of words such as “believes,” “estimates,” “expects,” “projects,” “may,” “will,” “intends,” “plans,” “anticipates,” “targets,” “should,” “would” or similar expressions or by discussions of strategy, plans, expectations, projections or intentions. All forward-looking statements in this document are made based on onsemi’s current expectations, forecasts, estimates and assumptions and involve risks, uncertainties and other factors that could cause results or events to differ materially from those expressed in the forward-looking statements. Certain factors that could affect onsemi’s future results or events are described under Part I, Item 1A “Risk Factors” in the 2025 Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 9, 2026 and from time to time in onsemi’s other SEC reports. Readers are cautioned not to place undue reliance on forward-looking statements. onsemi assumes no obligation to update such information, which speaks only as of the date made, except as may be required by law.

Contacts: 

Krystal Heaton
Director, Head of Public Relations
onsemi
(480) 242-6943
[email protected] 

Parag Agarwal
Vice President, Investor Relations & Corporate Development
onsemi
(602) 244-3437
[email protected]

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