ON Semiconductor Sees Boost From AI Growth And Stable Chip Market
News Summary
ON Semiconductor (Onsemi) reported its fiscal third-quarter 2025 results, with revenue declining 12% year-on-year to $1.55 billion, yet still surpassing the analyst consensus estimate of $1.52 billion. Adjusted EPS of 63 cents also beat the estimate of 59 cents. Revenue from all segments declined, with the Power Solutions Group (PSG) and Analog and Mixed-Signal Group (AMG) both down 11%, and the Intelligent Sensing Group (ISG) falling 18%. Adjusted gross margin and operating margin declined by 750 basis points and 900 basis points respectively, indicating pricing pressures within the semiconductor industry. Onsemi President and CEO Hassane El-Khoury noted that the company is experiencing steady stabilization in its core markets and continued growth in AI. He highlighted the rising demand for energy efficiency across automotive, industrial, and AI platforms, and the company's strategy to broaden its portfolio with system-level solutions. The company projects fourth-quarter adjusted revenue between $1.480 billion and $1.580 billion, and adjusted EPS of 57 cents to 67 cents, largely in line with or slightly above analyst expectations.
Background
ON Semiconductor (Onsemi) is a leading semiconductor supplier specializing in intelligent power and intelligent sensing technologies, with products widely used in high-growth markets such as automotive, industrial, communications, and cloud computing. In 2025, the global semiconductor market is navigating a complex landscape, where the explosive growth of Artificial Intelligence (AI) drives demand for specific chips, while macroeconomic uncertainties and supply chain adjustments lead to overcapacity and pricing pressures in certain segments. The company is actively expanding its portfolio to offer system-level solutions, addressing customer demands for energy efficiency, especially in power-intensive applications like electric vehicles, industrial automation, and AI computing. These efforts are aimed at solidifying its market position in key high-growth areas.
In-Depth AI Insights
What subtle balance in the current semiconductor market does Onsemi's beat despite revenue decline reveal? - This suggests that market expectations might have been sufficiently lowered, making even a year-over-year revenue decrease enough to constitute an