Design Wins$2.5B through 2030 from 4 major EV OEMs
Sic Revenue↑$1.2B (+45% YoY)
ON Semiconductor delivered exceptional Q2 results driven by 45% YoY growth in silicon carbide revenue, reaching $1.2B despite broader semiconductor market weakness. Automotive segment hit record revenue of $1.4B (+38% YoY) as EV adoption accelerates and content per vehicle increases. Gross margins expanded 320bps to 48.2% on improved product mix and operational efficiencies. Management raised FY25 guidance and announced $3B capacity expansion in SiC to meet surging demand from top EV makers.
Key Risks
SiC capacity expansion execution risk with $3B investment
Increased competition in SiC from new entrants
Auto production volatility impact on demand
High capex requirements straining balance sheet
Key Opportunities
30%+ CAGR in SiC through 2027 ($10B+ pipeline)
Content gains in ADAS and vehicle electrification
Industrial automation and renewable energy adoption
Operating leverage from 300mm transition and portfolio optimization
Bottom Line
ON Semiconductor has successfully transformed into a leading power semiconductor company with dominant positions in critical growth markets. Q2 results validate the strategic focus on automotive/industrial while demonstrating strong execution on margins and cash flow. The $3B SiC investment signals confidence in sustainable growth supported by secular trends in electrification. Key metrics to watch include SiC capacity ramp progress, design win momentum, and gross margin sustainability. The company appears well-positioned for continued outperformance despite broader semiconductor market uncertainty.