Stock Analysis | On Semiconductor Outlook - A Volatile Scenario with Mixed Signals

1. Market Snapshot

Headline Takeaway: On Semiconductor (ON) remains in technical neutrality, with mixed analyst ratings and a weak price trend of -1.54% recently.

2. News Highlights

• McKinsey on Tariffs and Chip Supply Chains - A new analysis from McKinsey explores the impact of U.S. tariffs on the semiconductor industry, highlighting potential supply chain shifts and policy implications for firms like ON.
• Japan's Rare Earths and Semiconductors Cooperation Plans - Japan is preparing to propose closer collaboration with the U.S. in rare earth materials and semiconductors, which could indirectly impact ON's supply chain dynamics and geopolitical exposure.
• indie Semiconductor's Financial Performance - indie Semiconductor, a competitor in the automotive semiconductor space, has reported a negative Return on Invested Capital (ROIC) of -18.68%, signaling operational inefficiencies and raising questions about ON's competitive position in the sector.

3. Analyst Views & Fundamentals

Analysts show a wide range of opinions, with a simple average rating of 3.77 and a performance-weighted rating of just 1.90, reflecting mixed and pessimistic sentiment. This is consistent with the recent price decline of -1.54%, though it suggests a significant disparity in expectations among institutions.

• Average Rating (Simple Mean): 3.77 (out of 5)
• Weighted Rating (Historical Performance): 1.90
• Rating Consistency: Dispersed, with 7 "Neutral", 4 "Strong Buy", and 2 "Buy" ratings in the last 20 days.
• Rating-Price Trend Alignment: The price drop aligns with the pessimistic weighting, indicating some level of market validation.

Key Fundamental Factors (Model Scores)

• Net Profit Margin (NPM): 11.69% (model score: 8.89 internal diagnostic score (0-10))
• Cash flow from operating activities (CFOA): 1.40% (model score: 6.60 internal diagnostic score (0-10))
• Profit-MV (Profit-to-Market Value): -12.95% (model score: 1.77 internal diagnostic score (0-10))
• Net Cash Flow from Operating Activities per Share (YoY Growth Rate): -97.65% (model score: 1.00 internal diagnostic score (0-10))
• Net Profit Attributable to Parent Company Shareholders (YoY Growth Rate): -139.91% (model score: 2.19 internal diagnostic score (0-10))

4. Money-Flow Trends

The fund-flow score is 7.42, indicating a positive overall trend. Here's the breakdown:

• Large & Extra-Large Investors: The large (negative trend) and extra-large (positive trend) inflow ratios stand at 49.05% and 51.86%, respectively.
• Block Inflows: At 51.39%, block inflows are moderately positive, signaling institutional interest.
• Retail (Small) Inflows: At 49.57%, retail inflows are mixed with a negative trend, reflecting caution among individual investors.

In summary, big-money players are showing optimism, but retail investors are hesitant, indicating a potential wait-and-see dynamic in the market.

5. Key Technical Signals

The technical score is 5.36, indicating technical neutrality with mixed signals. Here's the breakdown:

Internal Diagnostic Scores (0-10)

• RSI Oversold: 8.47 (strong bullish signal)
• Bearish Engulfing: 7.64 (neutral bullish)
• MACD Golden Cross: 5.71 (neutral bullish)
• WR Oversold: 3.63 (mildly bullish)
• WR Overbought: 1.59 (slightly bearish)
• MACD Death Cross: 6.40 (neutral rise)
• Marubozu White: 4.05 (neutral rise)

Recent Chart Patterns

• 2025-08-05: WR Oversold + Bearish Engulfing + RSI Oversold
• 2025-08-22: WR Overbought + MACD Golden Cross + Marubozu White
• 2025-09-03: MACD Death Cross + Bearish Engulfing

Key Insights: The technical indicators suggest a volatile market with no clear trend. Both long and short signals are relatively balanced, and traders are advised to monitor market movements closely for a potential breakout or reversal.

6. Conclusion

On Semiconductor is in a technical limbo, with conflicting signals and mixed institutional sentiment. The 7.42 fund-flow score offers some optimism, but the 5.36 technical score highlights uncertainty. With analysts' weighted rating at 1.90 and fundamentals showing mixed performance, investors may want to consider waiting for a clearer trend before making a move. For now, watch for volatility and potential catalysts in the coming weeks.