On Semiconductor Outlook - Mixed Signals Amid Volatile Market Conditions

Market Snapshot

Headline Takeaway: On Semiconductor (ON) is in a technical wait-and-see mode, with recent price trends down by -4.65%, but mixed signals from fundamental and money-flow indicators suggest caution and opportunity in equal measure.

News Highlights

Key Developments:

• McKinsey Report on Tariffs: Recent research from McKinsey highlights the impact of U.S. tariffs on semiconductor supply chains, suggesting a more uncertain regulatory environment for the industry.
• Japan-U.S. Cooperation on Rare Earths and Semiconductors: Japan is reportedly offering cooperation with the U.S. to counter China's dominance in the sector, which could impact global supply dynamics and chip manufacturing costs.
• $750M ETF Outflow: The US Semiconductors ETF (SOXX) saw a record $750 million outflow in May 2025, signaling a shift in investor sentiment toward the sector and potentially affecting semiconductor companies like On Semiconductor.

Analyst Views & Fundamentals

Analyst sentiment is currently mixed. The simple average rating is 3.00, while the performance-weighted rating is 1.65, indicating a disconnect between average expectations and historical performance. Analysts remain neutral, with the only recent rating from B of A Securities being a "Neutral" call.

This contrasts with the recent price decline of -4.65%, but the weighted expectations are aligned with the bearish price trend.

On the fundamental front, key factors include:

• Net Profit Attributable to Parent Company Shareholders (YoY): -139.91% (Model score: 2)
• Interest Coverage Ratio (EBIT / Interest Expense): -89.01% (Model score: 0)
• EV/EBIT: -43.19% (Model score: 0)
• Gross Profit Margin (GPM): 37.58% (Model score: 1)
• Total Assets Turnover Ratio: 21.42% (Model score: 3)

The mixed model scores reflect a company that is struggling with profitability and debt coverage but shows some efficiency in asset use and production margins.

Money-Flow Trends

Money-flow analysis reveals a split in investor behavior. While retail investors are showing a negative trend, larger institutional and block investors are in a positive trend. Specifically:

• Small-inflow ratio: 0.499, trend: negative
• Medium-inflow ratio: 0.488, trend: negative
• Large-inflow ratio: 0.495, trend: negative
• Extra-large-inflow ratio: 0.531, trend: positive

This means big money is flowing into On Semiconductor, but retail and mid-sized investors are pulling back. The fund-flow score is 7.22 (internal diagnostic score, 0-10), indicating a relatively strong inflow of capital from large players.

Key Technical Signals

The technical outlook remains cautious, with mixed signals and a score of 5.41 (internal diagnostic score, 0-10). The market is in a state of technical neutrality, and recent patterns suggest both bullish and bearish tendencies.

Recent Chart Patterns:

• September 3, 2025: MACD Death Cross (score: 6.92), Bearish Engulfing (score: 7.77)
• September 8, 2025: MACD Golden Cross (score: 5.71)
• August 5, 2025: WR Oversold (score: 3.38), Bearish Engulfing (score: 7.77), RSI Oversold (score: 8.47)

These signals suggest volatility. The RSI Oversold and Bearish Engulfing have the strongest internal scores, indicating potential short-term buying opportunities amid a broader wait-and-see stance.

Key Insights:

• Technical indicators show the market is in a volatile state with direction unclear.
• Long and short signals are relatively balanced, suggesting traders should monitor market changes closely.

Conclusion

On Semiconductor is in a holding pattern, with conflicting signals from fundamentals and mixed technical cues. The internal diagnostic fund-flow score (7.22) and the RSI and Bearish Engulfing signals (8.47 and 7.77) suggest potential for a rebound, but the weak fundamentals and volatile technicals warrant caution.

Actionable Takeaway: Consider waiting for a clearer breakout or a pull-back to a key support level before making a move. Investors should keep a close eye on upcoming earnings and industry news, especially in light of potential changes in U.S. tariff policies and global chip supply chain dynamics.