On Semiconductor Outlook - Mixed Signals Amid Volatile Market Conditions

Market Snapshot

Headline Takeaway: On Semiconductor (ON) is in a volatile technical environment with mixed signals, as reflected in a weak internal diagnostic score of 4.96.

News Highlights

1. McKinsey on Tariffs and Chip Supply Chains: Recent analysis by McKinsey highlights the ongoing uncertainty in the semiconductor sector due to US tariff policies, which could affect supply chains and investment decisions.

2. US Semiconductors ETF Faces $750M Outflow: The US Semiconductors ETF (SOXX) experienced a significant net outflow in May 2025, signaling investor caution and potentially affecting the broader semiconductor sector, including ON.

3. Japan-U.S. Cooperation on Rare Earths: Japan is reportedly considering proposals to enhance cooperation with the U.S. on rare earths and semiconductors. Such developments could reduce dependency on China and stabilize supply chains, indirectly benefiting On Semiconductor.

Analyst Views & Fundamentals

The analyst consensus shows a simple average rating of 3.00 and a performance-weighted rating of 1.65, indicating a generally cautious outlook. The rating consistency is described as “There are differences,” suggesting a lack of clear consensus among analysts. This contrasts with the current price trend, which shows a 3.70% rise, implying a disconnect between market sentiment and analyst expectations.

• Key fundamental values and their model scores:
  • Net profit attributable to parent company shareholders / Net profit: 100.73% (score: 1.00)
  • Net cash flow from operating activities per share (YoY growth rate): -93.20% (score: 1.00)
  • EV/EBIT: -43.19 (score: 1.00)
  • Cash-MV: -0.85 (score: 1.00)
  • Accounts receivable turnover ratio: 2.79 (score: 0.00)

These figures highlight a mixed fundamental outlook. While net profit margins appear strong, operating cash flow and EV/EBIT metrics are deteriorating, which could signal underlying financial pressures.

Money-Flow Trends

On the fund-flow front, big-money is showing a negative trend, with block inflow ratio at 49.34%, suggesting institutional caution. Meanwhile, retail investors are slightly more optimistic, with a positive small-trend at 50.27% and a positive large-trend at 50.22%. The overall inflow ratio stands at 49.37%, reinforcing the idea that large players are stepping back, while retail participation is moderate.

Key Technical Signals

The technical analysis paints a complex picture for ON. Recent chart patterns include:

• Bearish Engulfing (score: 7.77) – a strong negative internal diagnostic score suggesting bearish momentum.
• MACD Death Cross (score: 7.29) – another bearish signal with high internal weight.
• MACD Golden Cross (score: 4.12) – a mixed signal indicating a possible short-term reversal.
• WR Overbought (score: 1.59) – a weak positive score, indicating potential overbought conditions but low conviction.

Key insights from the technical analysis include “Technical indicators show that the market is in a volatile state, and the direction is not clear enough,” and “Long short signals are relatively balanced, and it is suggested to pay close attention to market changes.” This points to a lack of clear trend strength and the need for investors to remain cautious.

Conclusion

Given the mixed signals from both technical and fundamental analyses, and the recent volatility in the semiconductor sector, it may be prudent for investors to consider waiting for a clearer trend to emerge before making new positions. With internal diagnostic scores pointing to weak technical strength and mixed fundamentals, watching for a pull-back or a breakout in key indicators could offer a clearer roadmap for On Semiconductor’s next move.