ON Semiconductor's Q1 2025: Diverging Views on Automotive Recovery, Pricing Strategies, and Silicon Carbide Growth
Monday, May 5, 2025 9:11 pm ET
2min read None
Revenue and Earnings Performance:
- Onsemi reported Q1 revenue of $1.45 billion, exceeding the midpoint of their guidance, with non-GAAP earnings per share of $0.55.
- The earnings were higher than expected due to strong performance in certain parts of the industrial market and automotive segments.
Manufacturing and Operational Efficiencies:
- Onsemi reduced internal fab capacity by 12%, which is expected to lower ongoing depreciation costs by approximately $22 million annually.
- The reduction was part of their Fab Right initiative and aimed to improve operating efficiencies and gross margin expansion.
Silicon Carbide and Product Wins:
- Onsemi won a 750-volt PHEV design with a major U.S. automotive OEM, signaling a transition from silicon to silicon carbide in new PHEV platforms.
- The adoption of silicon carbide is expected to broaden the company's penetration in full battery electric vehicles (BEVs) and contribute to future growth.
Prudent Cash Flow Management:
- Onsemi increased its share buyback to 66% of free cash flow in Q1 and plans to increase it to 100% for the year.
- This move demonstrates confidence in their liquidity and strong balance sheet, emphasizing a focus on shareholder value.
Revenue and Earnings Performance:
- Onsemi reported Q1 revenue of $1.45 billion, exceeding the midpoint of their guidance, with non-GAAP earnings per share of $0.55.
- The earnings were higher than expected due to strong performance in certain parts of the industrial market and automotive segments.
Manufacturing and Operational Efficiencies:
- Onsemi reduced internal fab capacity by 12%, which is expected to lower ongoing depreciation costs by approximately $22 million annually.
- The reduction was part of their Fab Right initiative and aimed to improve operating efficiencies and gross margin expansion.
Silicon Carbide and Product Wins:
- Onsemi won a 750-volt PHEV design with a major U.S. automotive OEM, signaling a transition from silicon to silicon carbide in new PHEV platforms.
- The adoption of silicon carbide is expected to broaden the company's penetration in full battery electric vehicles (BEVs) and contribute to future growth.
Prudent Cash Flow Management:
- Onsemi increased its share buyback to 66% of free cash flow in Q1 and plans to increase it to 100% for the year.
- This move demonstrates confidence in their liquidity and strong balance sheet, emphasizing a focus on shareholder value.
Disclaimer: The news articles available on this platform are generated in whole or in part by artificial intelligence and may not have been reviewed or fact checked by human editors. While we make reasonable efforts to ensure the quality and accuracy of the content, we make no representations or warranties, express or implied, as to the truthfulness, reliability, completeness, or timeliness of any information provided. It is your sole responsibility to independently verify any facts, statements, or claims prior to acting upon them. Ainvest Fintech Inc expressly disclaims all liability for any loss, damage, or harm arising from the use of or reliance on AI-generated content, including but not limited to direct, indirect, incidental, or consequential damages.
