Stock Analysis | On Semiconductor Outlook - Technical Neutrality and Mixed Analyst Signals

Market Snapshot

Headline takeaway: On Semiconductor (ON) is currently in a technically neutral position with mixed signals from analysts and a recent price decline of -3.40%.

While technical indicators suggest a wait-and-see approach, market expectations are leaning toward pessimism, and the stock's price drop aligns with this bearish outlook.

News Highlights

1. McKinsey Report on Tariffs and Semiconductor Chains: New analysis from McKinsey explores the impact of US tariffs on the semiconductor industry, highlighting a highly volatile environment influenced by recent court rulings. This could affect ON, given its dependence on global supply chains.

2. Japan-U.S. Semiconductor Cooperation: Japan is reportedly proposing closer collaboration with the U.S. on rare earths and semiconductors, which could create new market dynamics and affect ON’s competitive positioning. The goal is to reduce dependence on China and correct trade imbalances.

3. AI Chip Startup Activity: Former executives from Intel and AMD are launching AI semiconductor startups in India, fueled by government incentives. This trend reflects growing global demand for semiconductors and could introduce new competitors for ON in the AI space.

Analyst Views & Fundamentals

Analysts are divided, with a simple average rating of 3.77 and a performance-weighted rating of 1.90. This shows a high degree of dispersion, with "Strong Buy" ratings (4) and "Neutral" ratings (7) dominating the recent 20-day period.

The current price trend of -3.40% aligns with the weighted pessimistic expectations, but the lack of consensus suggests uncertainty in the market. High-quality institutions like Needham (historical winning rate of 57.1%) have placed "Strong Buy" ratings, while most others have a poor or underperform rating.

• Fundamental Factors and Scores:
• Net cash flow from operating activities per share (YoY growth rate %): -7.24% (internal diagnostic score: 1.00)
• Net profit attributable to parent company shareholders / Net profit %: 100.73% (internal diagnostic score: 1.00)
• Total profit (YoY growth rate %): -138.16% (internal diagnostic score: 1.00)
• Net cash flow from operating activities (YoY growth rate %): -8.63% (internal diagnostic score: 1.00)
• Cash-UP: -1.14 (internal diagnostic score: 1.00)
• GPOA: 4.20% (internal diagnostic score: 1.00)
• Fixed assets turnover ratio: 0.72 (internal diagnostic score: 1.00)
• Interest coverage ratio (EBIT / Interest expense) %: -89.91% (internal diagnostic score: 1.00)
• Net profit attributable to parent company shareholders (YoY growth rate %): -139.91% (internal diagnostic score: 1.00)
• Cash-MV: -0.85 (internal diagnostic score: 1.00)

Money-Flow Trends

Big money and retail flows are showing a mixed picture. The overall fund-flow score is 7.53 (internal diagnostic score), indicating a "good" level of inflow activity.

Big money (block flows): The block inflow ratio is 51.04%, with a positive trend, suggesting institutional investors are showing cautious optimism.

Retail (small and medium flows): While the small inflow ratio is 49.51% and the trend is negative, the medium inflow ratio is 49.52%, with a positive trend. This indicates that while retail investors are somewhat bearish, there are pockets of optimism.

Key Technical Signals

On Semiconductor's technical outlook is currently neutral, with no clear directional signal emerging from the indicators. The technical score is 5.16 (internal diagnostic score), reflecting technical neutrality and a wait-and-see approach.

• Indicator Score Highlights:
• RSI Oversold: 8.47 (internal diagnostic score) – strong bullish signal
• Bearish Engulfing: 7.64 (internal diagnostic score) – neutral rise
• MACD Golden Cross: 5.71 (internal diagnostic score) – neutral rise
• Marubozu White: 4.05 (internal diagnostic score) – neutral rise
• WR Oversold: 3.50 (internal diagnostic score) – neutral rise
• WR Overbought: 1.59 (internal diagnostic score) – neutral bias

Recent Chart Patterns by Date:

• 20250822: WR Overbought, MACD Golden Cross, and Marubozu White signals
• 20250811: WR Oversold, Bearish Engulfing, and RSI Oversold signals

These patterns suggest short-term volatility and mixed momentum, with no clear directional bias emerging from the past 5 days of data.

Conclusion

On Semiconductor is currently in a technical holding pattern, with mixed analyst ratings and a negative price trend. While there are strong bullish indicators (like RSI Oversold and Bearish Engulfing), these are counterbalanced by bearish and neutral signals.

Actionable takeaway: Consider waiting for a clearer breakout or pull-back before making any investment decisions. Keep an eye on the upcoming market reaction to the latest U.S.-Japan cooperation developments and the performance of key fundamental metrics like cash flow and profitability.