The Value and Future Prospects of ON Semiconductor in the Chip Industry

Overview

ON Semiconductor, a key player in silicon carbide (SiC) power chips, is in a phase of transition with strategies focusing on advanced chip manufacturing.

Current State

• Stock Performance: ON Semiconductor is at a 52-week low, reflecting challenges in the EV market.
• Financial Reshuffle: CEO El-Khoury's restructuring efforts have led to improved profit margins.
• Industry Challenges: Declining revenue and earnings as EV and industrial chip demand slump.

Future Outlook

1. Value Proposition: Despite near-term struggles, ON Semiconductor's growth in power chips positions it well for future demand.
2. Revenue Expectation: Management forecasts sustained growth targets until 2027, backed by strong demand.
3. Investment Consideration: With a focus on power chips & sensors, ON Semiconductor presents a compelling long-term investment opportunity.