ON Semiconductor Corporation

What they do

onsemi designs and sells intelligent power and intelligent sensing semiconductors for automotive, industrial and other end-markets, including AI data centers. Its power technologies target electrified drivetrains, fast charging, solar strings, industrial power and AI data center power trees; its sensing technologies target automotive safety, factory and building automation, robotics and humanoids. The company reports through three segments: Power Solutions Group (PSG), Analog and Mixed-Signal Group (AMG) and Intelligent Sensing Group (ISG).

Revenue drivers

• Power Solutions Group (PSG) — The largest segment, at $829.0M of Q2 2026 revenue (up 19% year-over-year); houses power products including the EliteSiC silicon carbide portfolio and the SiC JFET business acquired from Qorvo in January 2025.
• Analog and Mixed-Signal Group (AMG) — Second-largest segment at $545.7M in Q2 2026 (down 2% year-over-year, up 1% sequentially); includes analog and mixed-signal products and the Vcore power technology rights acquired from Aura Semiconductor in October 2025.
• Intelligent Sensing Group (ISG) — Smallest segment at $228.8M in Q2 2026 (up 7% year-over-year, down 3% sequentially); covers sensing products for automotive safety and industrial automation/robotics applications.
• AI data center — Described in the Q2 2026 earnings release as the company's fastest-growing business; management said it now expects AI data center revenue to more than double in 2026.

Recent performance

Second quarter 2026 revenue was $1,603.5M, up 9% year-over-year from $1,468.7M and up from $1,513.3M in Q1 2026. GAAP gross margin was 38.4%, GAAP operating margin 16.1%, and GAAP diluted EPS $0.56, versus GAAP EPS of $0.41 in Q2 2025 and a GAAP loss per share of $0.08 in Q1 2026. Non-GAAP diluted EPS was $0.74, against $0.53 a year earlier. GAAP net income attributable to the company was $226.8M, and the release cited cash from operations up 150% with free cash flow of $425.4M. Segment revenue was $829.0M in PSG, $545.7M in AMG and $228.8M in ISG.

Strategy

onsemi says it is focused on increasing profitable revenue through differentiated technologies addressing automotive, industrial and AI data center megatrends, while right-sizing its manufacturing footprint. In 2025 it completed the SiC JFET acquisition from Qorvo for $118.8M cash and acquired rights to Vcore power technologies from Aura Semiconductor for up to $144M, and it ran a manufacturing realignment program with $67.1M of severance and related costs for roughly 2,400 terminated employees. On June 25, 2026, it entered a merger agreement to acquire Synaptics in an all-stock deal (1.350 onsemi shares per Synaptics share), with Synaptics holders expected to own about 12% of the combined company pro forma; the deal is anticipated to close in mid-2027. The company also launched the GaNEXUS gallium nitride power portfolio and reported expanded AI infrastructure engagements including the NVIDIA MGX ecosystem and Great Wall.

Risks

• Automotive and industrial demand cyclicality — Annual revenue fell from $8.25B in 2023 to $7.08B in 2024 and $6.00B in 2025, and net income dropped to $121.0M in 2025, showing exposure to end-market downturns.
• Manufacturing realignment execution — The 2025 program carried $67.1M of severance and related costs for about 2,400 employees plus non-cash impairments, so realizing the intended gross margin and cash flow benefits is not assured.
• Synaptics integration and closing risk — The pending all-stock Synaptics acquisition, expected to close in mid-2027, is subject to Synaptics stockholder approval and HSR clearance, and would dilute existing holders by roughly 12% on a pro forma basis.
• Contingent acquisition payments — Up to $144M is payable for the Aura Vcore rights, with $72M tied to acceptance and delivery of specified products and $72M contingent on revenue milestones through 2030.

Outlook

Management said Q2 2026 revenue, gross margin and EPS came in above the midpoint of guidance and cited strengthening demand, particularly across AI-driven applications. It stated it now expects AI data center revenue to more than double in 2026 and that it is increasingly confident in driving profitable growth as demand improves. The company also disclosed that the Synaptics merger is anticipated to close in mid-2027. No full-year 2026 revenue or margin guidance figures are included in the provided excerpts.