ON Semiconductor: A Buy With Caution Advised

Omer Cheema
72 Followers
(11min)

Summary

  • Revenue of Analog and Power Semiconductor companies has been declining since late 2023. It is still unclear whether a bottom has been reached.
  • ON Semiconductor has managed to stay profitable so far. But the uncertainty around market recovery and the risk of commoditization of Silicon Carbide poses some risks.
  • From a valuation perspective, the stock seems to have priced in these risks. I recommend a buy, with caution.

Onsemi office at 611 Kumpf Dr in Waterloo, Ontario, Canada

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ON Semiconductor (NASDAQ:ON) revenue has declined 36% since its previous peak of the last semiconductor cycle. The stock has also declined more than 60% as a result. While investors need to be cautious of macroeconomic and geopolitical risks, the stock is a buy at

This article was written by

72 Followers
Dr. Omer Cheema is a semiconductor industry executive with 20+ years of experience spanning engineering, strategy, marketing and general management roles. He is currently a Senior Director at Renesas Electronics, where he manages Analog and Connectivity related product lines. Prior to this, he spent nine years at Samsung Device Solutions in strategy and technical leadership roles. He began his career as a GPU design engineer at AMD. He holds a PhD in semiconductors from ENSTA Paris and an MBA from INSEAD. He enjoys following semiconductor industry trends and is active on sharing his insights on SeekingAlpha, Twitter and Substack. You can reach him at omer.cheema@insead.edu.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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