ON Semiconductor outperformed analyst expectations in the quarter, with revenue of $1.96 billion and non-GAAP gross margin of 46.8%. Despite a general global recession, demand for electric vehicles, ADAS, and energy infrastructure remained strong. Even though the company’s automotive revenue rose 38% year over year, it remained constant quarter over quarter. Several automotive technologies are still supply-restricted, and ON is cautiously watching the inventory depletion in several other technologies. In Q1, automotive and industrial made up 79% of the company’s overall revenue, up from 65% in the same period last year. In addition, ON Semiconductor increased the visibility of demand across all markets due to LTSA agreements from both old and new customers. Their exposure to market volatility in the consumer and computing sectors was also decreased because of these LTSAs. Moreover, ON introduced its new Elite power simulation tool in March to accelerate the time to market complicated power electronics applications through system-level simulations, sparing design engineers from costly and time-consuming hardware fabrication and testing in the early phases of development. The company also introduced the latest Hyper Lux family of image sensors to enable the shift to 8-megapixel smartphones. We give ON Semiconductor Corporation a ‘Hold’ rating with a revised target price.
Our Report Structure:
⦁ Company Overview
⦁ Investment Thesis
⦁ Key Drivers
⦁ Historical Quarterly Statement Analysis – Income Statement & Cash Flows
⦁ Historical Quarterly Balance Sheet Analysis
⦁ Historical Annual Financial Statement Analysis
⦁ Analysis Of Key Financial Ratios
⦁ Financial Forecasts For 3 Years
⦁ Forecasting The Capital Structure & Net Debt
⦁ Discounted Cash Flow Valuation
⦁ Trading Multiples
⦁ Key Risks
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