ON Semiconductor Corporation
ON Semiconductor Corporation provides intelligent sensing and power solutions in Hong Kong, Singapore, the United Kingdom, the United States, and internationally. It operates through three segments: Power Solutions Group, Analog and Mixed-Signal Group, and Intelligent Sensing Group. The Power Solutions Group segment offers discrete, module, and integrated semiconductor devices designed to enable power conversion, including power switching, signal conditioning, and circuit protection technologies. Its Analog and Mixed-Signal Group segment designs and develops analog and mixed-signal solutions, including power management, sensor interface, connectivity, and standard products for automotive, industrial automation, AI data centers, computing, and mobile end markets. The Intelligent Sensing Group segment develops complementary metal-oxide-semiconductor image sensors, image signal processors, short-wave infrared sensors, and other products, as well as photon-counting technologies, including single-photon avalanche diode arrays and silicon photomultiplier devices for depth sensing, factory automation, safety systems, and robotics industries. ON Semiconductor Corporation was incorporated in 1992 and is headquartered in Scottsdale, Arizona.
What does it do?
ON Semiconductor makes the chips that control power and sensing in physical machines — think electric vehicles, solar inverters, and industrial robots. When your EV manages how electricity flows from the battery to the motor without wasting energy as heat, there's a good chance an ON Semi chip is doing that job. They also make image sensors, which are the 'eyes' in cameras used for driver assistance systems that help cars detect pedestrians and lane markings. Essentially, they sit at the intersection of two massive trends: the electrification of transportation and the push to make machines smarter.
ON Semiconductor is one of a small group of chip companies that specifically targets electric vehicles and renewable energy — two sectors governments worldwide are pouring money into. As automakers race to electrify their lineups, the power chips ON Semi makes become critical bottlenecks, meaning car manufacturers need them badly. The company is also a key supplier to the industrial automation market, which is expanding as factories invest in efficiency amid rising labor costs.
How does it make money?
ON Semi makes money by selling semiconductor chips across three divisions. The biggest is the Power Solutions Group, which sells chips that manage electricity flow in EVs, solar panels, and industrial equipment — this is the core of the business. The Analog and Mixed-Signal Group handles signal processing chips used in communications and industrial systems. The Intelligent Sensing Group makes image sensors, primarily for automotive cameras. Total revenue came in at $6.0 billion last year, down from $7.1 billion the prior year, reflecting a broad semiconductor industry slowdown.
Why do investors care?
The growth story here is simple: every EV needs far more power chips than a traditional gas car, so even modest EV adoption growth translates into strong demand for ON Semi's products. The company has been deliberately exiting lower-margin, commodity chip businesses and focusing on higher-value automotive and industrial chips — a strategy that should lift profitability over time. For the thesis to work, EV adoption needs to keep climbing, ON Semi needs to win and hold major supply contracts with automakers, and the broader chip inventory correction needs to fully clear. Investors are essentially betting that the near-term revenue dip is temporary pain before a structural growth cycle kicks in.
Deep Dive
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