ON Semiconductor's Plunge in 2025: A Closer Look

ON Semiconductor Corporation (ON) has been on a downward spiral in 2025, with its stock price plummeting by 29.02% year-to-date. This decline has raised concerns among investors, who are eager to understand the reasons behind this significant drop. In this article, we will delve into the factors contributing to ON Semiconductor's poor performance and explore the potential for a turnaround.



One of the primary reasons for ON Semiconductor's decline is the company's weak financial performance. In Q4 2024, the company reported revenue of $1.72 billion, missing analyst estimates of $1.76 billion. Adjusted EPS also came in at $0.95, below the expected $0.97. All of its major segments reported revenue declines, with Power Solutions Group's revenue down 16%, Analog and Mixed-Signal Group down 18%, and Intelligent Sensing Group's revenue down about 2%. This poor financial performance indicates that the company is facing significant challenges in its core businesses.

Another factor contributing to ON Semiconductor's decline is the company's weak guidance for Q1 2025. Revenue is expected to be in the range of $1.35 billion to $1.45 billion, well below analyst estimates of $1.69 billion. Gross margin guidance was also reduced to 38.9%-40.9%. This weak guidance suggests that the company expects continued challenges in the near future.

ON Semiconductor's restructuring plan, which includes cutting 9% of its workforce to reduce costs amid declining demand and falling revenue, has also negatively impacted investor confidence. The layoffs are expected to cost $50 million to $60 million in charges this year. This restructuring plan indicates that the company is taking steps to address its financial pressures, but it also raises concerns about the company's long-term prospects.

Market conditions, such as demand for specific semiconductor products and geopolitical tensions, have also played a role in ON Semiconductor's stock price performance. The company's products are used in various industries, including automotive, industrial, and consumer electronics. Changes in demand for these products, as well as geopolitical tensions that disrupt supply chains, can impact the company's financial performance and stock price.

Despite these challenges, there are reasons to be optimistic about ON Semiconductor's future. The company's products are essential components in various industries, and the demand for semiconductors is expected to grow in the coming years. Additionally, ON Semiconductor's restructuring efforts and cost-cutting measures may help the company improve its financial performance and return to profitability.

In conclusion, ON Semiconductor's decline in 2025 can be attributed to a combination of specific company issues, such as weak financial performance and restructuring efforts, as well as broader industry challenges, such as market conditions and geopolitical tensions. While the company faces significant challenges, its products remain in high demand, and its cost-cutting measures may help it return to profitability. Investors should closely monitor ON Semiconductor's progress and consider the potential for a turnaround in the coming months.