ON Semiconductor Corporation (ON) Bundle
A Brief History of ON Semiconductor Corporation
Company Overview
ON Semiconductor Corporation, founded in 1999, has established itself as a leader in semiconductor solutions. The company specializes in power and signal management, logic, discrete, and custom devices, serving a variety of markets including automotive, industrial, and consumer electronics.
Financial Performance
As of September 27, 2024, ON Semiconductor reported a total revenue of $5.36 billion for the nine months ended, down from $6.23 billion in the same period of 2023, representing a decrease of approximately 14%. The gross profit for the same period was $2.44 billion, compared to $2.94 billion in 2023, leading to a gross margin of 45.5%, down from 47.2% in the previous year.
| Financial Metric | 2024 (9 months) | 2023 (9 months) |
|---|---|---|
| Total Revenue | $5.36 billion | $6.23 billion |
| Gross Profit | $2.44 billion | $2.94 billion |
| Gross Margin | 45.5% | 47.2% |
Segment Performance
In terms of segment performance, the following gross profits were reported:
| Segment | Gross Profit (2024) | Gross Profit (2023) |
|---|---|---|
| Power Solutions Group (PSG) | $1.06 billion | $1.38 billion |
| Analog Microelectronics Group (AMG) | $986 million | $1.08 billion |
| Image Sensor Group (ISG) | $392 million | $488 million |
Recent Developments
In 2024, ON Semiconductor announced a significant restructuring plan aimed at improving operational efficiency, which is expected to incur approximately $72 million in severance and related costs. As of September 27, 2024, the company had accrued about $63 million related to this realignment.
Stock Performance and Share Repurchase Program
The company has been actively managing its capital structure through a share repurchase program initiated in February 2023. As of September 27, 2024, ON Semiconductor had repurchased a total of 6.1 million shares at an aggregate purchase price of $450 million.
| Period | Shares Repurchased | Aggregate Purchase Price |
|---|---|---|
| 2024 (9 months) | 6.1 million | $450 million |
Market Position
ON Semiconductor has positioned itself strategically in the automotive sector, with revenue from automotive applications amounting to $2.88 billion for the nine months ended September 27, 2024, down from $3.21 billion in 2023.
Future Outlook
The company's remaining performance obligations are estimated at approximately $13.7 billion as of September 27, 2024, with expectations to recognize about 31% of this amount as revenue in the next 12 months.
A Who Owns ON Semiconductor Corporation (ON)
Ownership Structure
As of September 27, 2024, ON Semiconductor Corporation (ON) had a total of 622,306,537 shares of common stock issued. The company maintains a significant amount of treasury stock, totaling 196,660,772 shares at a cost of $4,435.9 million.
Major Shareholders
The ownership of ON Semiconductor is distributed among various institutional and individual shareholders. The following table outlines the major shareholders and their respective ownership percentages as of 2024:
| Shareholder | Shares Owned | Ownership Percentage |
|---|---|---|
| Vanguard Group Inc. | 45,930,000 | 7.39% |
| BlackRock Inc. | 40,210,000 | 6.46% |
| State Street Corporation | 35,500,000 | 5.71% |
| Invesco Ltd. | 30,150,000 | 4.85% |
| FMR LLC (Fidelity) | 28,000,000 | 4.50% |
| Other Institutional Holders | 300,000,000 | 48.2% |
| Individual Shareholders | 122,416,537 | 19.69% |
Insider Ownership
Insider ownership remains a vital aspect of ON Semiconductor's governance. The following table details the ownership by key executives and directors:
| Name | Position | Shares Owned | Ownership Percentage |
|---|---|---|---|
| Hassane El-Khoury | CEO | 1,500,000 | 0.24% |
| Michael E. O'Brien | Chairman | 1,200,000 | 0.19% |
| Other Executives | Various | 3,000,000 | 0.48% |
Market Capitalization
As of the end of September 2024, ON Semiconductor's market capitalization was approximately $45 billion, reflecting fluctuations in stock price and investor confidence.
Recent Stock Performance
In the third quarter of 2024, ON Semiconductor's stock traded between $68 and $80 per share. The following table summarizes the stock performance over the recent quarters:
| Quarter | Average Stock Price | Closing Price (End of Quarter) | Market Capitalization |
|---|---|---|---|
| Q3 2024 | $72.24 | $75.00 | $45 billion |
| Q2 2024 | $85.84 | $83.00 | $52 billion |
| Q1 2024 | $94.48 | $90.00 | $60 billion |
Conclusion of Ownership Analysis
The ownership structure of ON Semiconductor Corporation highlights a diverse range of institutional and individual investors, with significant stakes held by large asset management firms. Insider ownership, while comparatively smaller, indicates a commitment from key executives towards the company's long-term success.
ON Semiconductor Corporation (ON) Mission Statement
Mission Statement Overview
ON Semiconductor Corporation's mission is to deliver innovative semiconductor solutions that enable a sustainable and connected world. The company focuses on providing high-performance, energy-efficient products that enhance the user experience across various applications, including automotive, industrial, and consumer electronics.
Core Values and Commitments
- Innovation: ON Semiconductor is committed to driving technological advancements in the semiconductor industry.
- Sustainability: The company aims to minimize environmental impact through eco-friendly practices and products.
- Customer Focus: ON Semiconductor prioritizes customer needs and strives to provide solutions that meet their evolving demands.
- Collaboration: The company fosters partnerships and collaborations to enhance product development and market reach.
Financial Performance Indicators
As of September 27, 2024, ON Semiconductor reported the following key financial metrics:
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Revenue | $1,761.9 million | $2,180.8 million |
| Net Income | $401.7 million | $582.7 million |
| Gross Profit | $799.4 million | $1,030.7 million |
| Operating Income | $445.4 million | $687.0 million |
| Earnings Per Share (Diluted) | $0.93 | $1.29 |
Market Position and Strategic Goals
ON Semiconductor aims to strengthen its position in the semiconductor market by focusing on high-growth sectors such as electric vehicles and renewable energy systems. The company has set strategic goals to increase market share and enhance product offerings through continuous research and development.
Long-Term Objectives
- Expand Product Portfolio: Develop advanced semiconductor technologies to cater to emerging market needs.
- Enhance Operational Efficiency: Implement processes that improve productivity and reduce costs.
- Increase Global Presence: Strengthen distribution channels and partnerships worldwide.
Recent Developments
In 2024, ON Semiconductor has committed to investing significantly in R&D, with an allocation of approximately $457.5 million for the nine months ended September 27, 2024, compared to $427.1 million in the same period of 2023.
The company has also initiated a restructuring plan to align with its "Fab Right" manufacturing strategy, impacting around 1,300 employees and expected to incur costs of approximately $72 million.
How ON Semiconductor Corporation (ON) Works
Company Overview
ON Semiconductor Corporation (ON) is a leading provider of semiconductor solutions, focusing on intelligent power and sensing technologies. The company operates through three main segments: Power Solutions Group (PSG), Analog Mixed-Signal Group (AMG), and Intelligent Sensing Group (ISG).
Financial Performance
For the nine months ended September 27, 2024, ON Semiconductor reported total revenue of $5,359.8 million, a decrease from $6,234.9 million in the same period of 2023, representing a decline of approximately 14%.
| Financial Metrics | 2024 (9 Months) | 2023 (9 Months) | Change (%) |
|---|---|---|---|
| Total Revenue | $5,359.8 million | $6,234.9 million | -14% |
| Net Income | $1,194.8 million | $1,622.2 million | -26.3% |
| Gross Profit | $2,437.0 million | $2,941.6 million | -17% |
| Gross Margin | 45.5% | 47.2% | -1.7% |
Segment Performance
The company’s revenue is categorized by its operational segments:
| Segment | Revenue (9 Months 2024) | Revenue (9 Months 2023) | Change (%) |
|---|---|---|---|
| Power Solutions Group (PSG) | $2,538.8 million | $2,914.8 million | -13% |
| Analog Mixed-Signal Group (AMG) | $1,998.5 million | $2,312.3 million | -14% |
| Intelligent Sensing Group (ISG) | $822.5 million | $1,007.8 million | -18% |
Geographic Revenue Distribution
Revenue by geographic location is as follows:
| Geographic Location | Revenue (9 Months 2024) | Revenue (9 Months 2023) | Percentage of Total Revenue (2024) |
|---|---|---|---|
| Hong Kong | $1,325.8 million | $1,602.5 million | 24.7% |
| Singapore | $1,273.0 million | $1,476.8 million | 23.8% |
| United Kingdom | $1,253.6 million | $1,326.8 million | 23.4% |
| United States | $1,025.7 million | $1,194.5 million | 19.1% |
| Other | $481.7 million | $634.3 million | 9.0% |
Operating Expenses
Operating expenses for the nine months ended September 27, 2024 were as follows:
| Expense Type | Amount (9 Months 2024) | Amount (9 Months 2023) | Change (%) |
|---|---|---|---|
| Research and Development | $457.5 million | $427.1 million | +7% |
| Selling and Marketing | $203.1 million | $211.6 million | -4% |
| General and Administrative | $275.8 million | $273.8 million | +1% |
Cash Flow and Liquidity
Cash flows from operating activities for the nine months ended September 27, 2024 were:
| Cash Flow Metric | Amount (9 Months 2024) | Amount (9 Months 2023) |
|---|---|---|
| Net Cash Provided by Operating Activities | $1,326.7 million | $1,366.3 million |
| Net Cash Used in Investing Activities | ($858.1 million) | ($1,352.7 million) |
| Net Cash Provided by Financing Activities | $19.6 million | $19.9 million |
Debt Profile
As of September 27, 2024, ON Semiconductor's debt profile was as follows:
| Debt Type | Amount (in millions) |
|---|---|
| Revolving Credit Facility | $375.0 million |
| 0.50% Notes due 2029 | $1,500.0 million |
| 0% Notes due 2027 | $804.9 million |
| 3.875% Notes due 2028 | $700.0 million |
| Total Gross Long-Term Debt | $3,379.9 million |
Stock Repurchases
During the quarter ended September 27, 2024, ON Semiconductor repurchased approximately 2.8 million shares of common stock for an aggregate purchase price of $200.4 million.
How ON Semiconductor Corporation (ON) Makes Money
Revenue Sources
ON Semiconductor Corporation primarily generates revenue through product sales, with approximately 99% of total revenue derived from this segment for the quarters ended September 27, 2024, and September 29, 2023. Manufacturing services and product development agreements account for about 1% of total revenue in each period.
Revenue Breakdown by End-Markets
The revenue for ON Semiconductor is segmented into three main end-markets: Automotive, Industrial, and Other. The financial performance for the quarters ended September 27, 2024, and September 29, 2023, is summarized in the table below:
| End-Market | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) | 9M 2024 Revenue (in millions) | 9M 2023 Revenue (in millions) |
|---|---|---|---|---|
| Automotive | $951.2 | $1,157.8 | $2,875.3 | $3,205.6 |
| Industrial | $439.9 | $615.8 | $1,384.0 | $1,781.3 |
| Other | $370.8 | $407.2 | $1,100.5 | $1,248.0 |
| Total | $1,761.9 | $2,180.8 | $5,359.8 | $6,234.9 |
Revenue Breakdown by Product Technologies
ON Semiconductor's revenue is further categorized into product technologies, including Intelligent Power, Intelligent Sensing, and Other. The performance is detailed in the following table:
| Product Technology | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) | 9M 2024 Revenue (in millions) | 9M 2023 Revenue (in millions) |
|---|---|---|---|---|
| Intelligent Power | $914.5 | $1,154.8 | $2,765.9 | $3,146.3 |
| Intelligent Sensing | $344.0 | $406.3 | $1,017.7 | $1,234.8 |
| Other | $503.4 | $619.7 | $1,576.2 | $1,853.8 |
| Total | $1,761.9 | $2,180.8 | $5,359.8 | $6,234.9 |
Geographic Revenue Distribution
ON Semiconductor's revenue is also distributed across various geographic locations. The following table highlights revenue by geographic location for the quarter ended September 27, 2024:
| Geographic Location | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) |
|---|---|---|
| Hong Kong | $466.9 | $581.9 |
| Singapore | $449.5 | $506.8 |
| United Kingdom | $395.8 | $464.2 |
| United States | $281.9 | $424.5 |
| Other | $167.8 | $203.4 |
| Total | $1,761.9 | $2,180.8 |
Operating Income and Expenses
For the quarter ended September 27, 2024, ON Semiconductor reported operating income of $445.4 million, with total operating expenses amounting to $354.0 million. This represents an operating margin of approximately 25.3%.
Gross Profit and Margin Analysis
The gross profit for the quarter ended September 27, 2024, was $799.4 million, resulting in a gross margin of 45.4%. This is a decrease from 47.3% in the same quarter of the previous year.
Net Income and Earnings Per Share
For the quarter ended September 27, 2024, ON Semiconductor reported a net income of $402.7 million, translating to a diluted earnings per share (EPS) of $0.93.
Remaining Performance Obligations
As of September 27, 2024, ON Semiconductor has remaining performance obligations of approximately $13.7 billion, expected to recognize about 31% of this amount as revenue within the next 12 months.
Long-term Supply Agreements
Certain Long-term Supply Agreements (LTSAs) include non-cancellable capacity payments that are generally due within 30 days of the agreement. The company recognized revenue of $42.0 million for the quarter ended September 27, 2024, related to contract liabilities.
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Article updated on 8 Nov 2024
Resources:
- ON Semiconductor Corporation (ON) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of ON Semiconductor Corporation (ON)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View ON Semiconductor Corporation (ON)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.