| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 89.97 | 86 |
| Intrinsic value (DCF) | 8.19 | -83 |
| Graham-Dodd Method | 35.27 | -27 |
| Graham Formula | n/a |
ON Semiconductor Corporation (NASDAQ: ON) is a leading provider of intelligent sensing and power solutions, driving innovation in the semiconductor industry. Headquartered in Phoenix, Arizona, the company operates through three key segments: Power Solutions Group, Advanced Solutions Group, and Intelligent Sensing Group. ON Semiconductor specializes in analog, discrete, module, and integrated semiconductor products that enhance power efficiency, signal processing, and automation across automotive, industrial, and energy markets. With a strong focus on electrification, the company supports the transition to electric vehicles (EVs), renewable energy systems, and fast-charging infrastructure. Its advanced CMOS image sensors and power management ICs are critical for automotive ADAS (Advanced Driver Assistance Systems), industrial automation, and IoT applications. ON Semiconductor’s vertically integrated manufacturing and strategic focus on high-growth markets position it as a key enabler of next-generation technologies.
ON Semiconductor presents a compelling investment case due to its strong positioning in high-growth markets like automotive electrification, industrial automation, and renewable energy. The company’s revenue of $7.08B (TTM) and net income of $1.57B reflect solid profitability, supported by a robust operating cash flow of $1.91B. However, its beta of 1.39 indicates higher volatility compared to the broader market, and the lack of dividends may deter income-focused investors. The semiconductor industry is cyclical, and ON faces competition from larger players like Texas Instruments and Infineon. That said, its focus on energy-efficient solutions and strategic investments in silicon carbide (SiC) and gallium nitride (GaN) technologies could drive long-term growth, particularly in EV and power management applications.
ON Semiconductor competes in the highly fragmented semiconductor industry, where differentiation is driven by technological innovation, manufacturing efficiency, and customer relationships. The company’s key competitive advantages include its vertically integrated supply chain, which allows for cost control and reliability, and its strong focus on automotive and industrial markets—two of the fastest-growing semiconductor segments. ON’s intelligent power and sensing solutions are critical for EVs, renewable energy, and automation, giving it an edge over generalist competitors. However, it faces intense competition from larger firms like Texas Instruments (TXN) and Infineon (IFNNY), which have greater R&D budgets and broader product portfolios. ON’s specialization in power management and image sensors helps it maintain a niche, but it must continue investing in next-gen technologies (SiC/GaN) to stay ahead. Pricing pressure and cyclical demand fluctuations remain risks, but its asset-light manufacturing strategy helps mitigate some cost pressures.