Research · Sep 3, 2026
[ON] ON Semiconductor Thesis 2026: Silicon Carbide Drives EV Power Semiconductor Compounding
ON Semiconductor Corporation (Onsemi) FY2025 revenue ~$6.0-6.4B (-15 to -10%) with adj. EPS ~$2.40-2.80 reflecting continued post-2022 EV/automotive cycle weakness + selected industrial inventory destock + selected silicon carbide (SiC) leadership + selected post-2024 management restructuring under continued CEO Hassane El-Khoury (since 2020). Leading global power semiconductor + image sensor firm; founded 1999 as spin-off from Motorola Inc. semiconductor components group; renamed Onsemi 2018 (selected branding refresh); IPO 2000 ~$300M raised; selected ~26+ year heritage post-Motorola spin. Headquartered in Phoenix Arizona; ~32,000+ employees globally with ~$6.0-6.4B revenue; fiscal year ends ~December. End-market mix: Automotive ~50% ($3.0-3.2B; selected EV power semiconductors + ADAS image sensors + selected ICE legacy; selected SiC silicon carbide leadership ~$1B+ revenue) + Industrial ~26% ($1.6B; selected factory automation + selected medical + selected aerospace/defense; selected post-2023 destock) + Other ~24% ($1.5B; selected consumer + Cloud Power). Product groups: Power Solutions Group (PSG) 50% ($3.0-3.2B — selected silicon carbide ~$1B+ revenue + selected MOSFETs + IGBTs + selected) + Analog & Mixed-Signal Group (AMG) 30% ($1.8-2.0B — selected analog + mixed-signal) + Intelligent Sensing Group (ISG) 20% ($1.2-1.4B — selected image sensors automotive ADAS + machine vision). Selected #2 global SiC supplier (vs Wolfspeed #1 + selected STMicroelectronics + Infineon competitive); selected ~$1B+ FY2025 SiC revenue + selected major customer wins (selected Tesla + BMW + selected hyperscaler EV charging + selected); selected post-2022 strategic shift away from selected commodity standard products toward selected high-margin power + image sensor focus. CEO Hassane El-Khoury since December 2020 (succeeded Keith Jackson CEO 2002-December 2020 retired; El-Khoury ex-Cypress Semiconductor CEO 2016-2020 sold to Infineon $9B 2020 + ex-Cypress various roles + ~25-year semiconductor executive career; Lebanese-American; PhD electrical engineering Oakland University). Key transactions: 1999 Motorola spin-off + 2018 Onsemi rebrand + 2022 GTAT $415M (silicon carbide substrates) + 2022 selected divestitures of commodity standard products + 2024 management restructuring. Selected Tesla customer concentration ~10-15% revenue concentration; selected post-2024 Tesla SiC supply diversification away from ON (selected ~$200-400M revenue at-risk). Capital return: no dividend policy; buybacks $0.5-1B (selected modest post-2024 weakness); investment-grade Baa1/BBB credit rating; net cash position ~$1-2B. FY2026 thesis: silicon carbide growth + EV cycle stabilization + industrial cycle recovery + capital return. Risks: EV adoption deceleration, Tesla customer concentration, industrial cycle severity, competitive intensity (Infineon + STMicroelectronics + Wolfspeed).