Core Viewpoint - High-rolling investors are taking a bearish position on ON Semiconductor, indicating potential privileged information influencing their trading decisions [1] Options Activity - The sentiment among major traders is predominantly bearish, with 94% of options identified being bearish and only 0% bullish [2] - A total of 19 options trades were detected, including one put worth $29,000 and 18 calls totaling $720,645 [2] Price Target - Major market movers are focusing on a price range between $25.0 and $55.0 for ON Semiconductor over the past three months [3] Volume & Open Interest Trends - Analyzing volume and open interest provides insights into the liquidity and interest in ON Semiconductor's options, particularly within the $25.0 to $55.0 strike price range over the last 30 days [4] Significant Options Trades - Recent significant options trades include multiple bearish call trades with varying strike prices and total trade prices, indicating a cautious outlook among traders [8] Company Overview - ON Semiconductor is a leading supplier of power semiconductors and sensors, primarily serving the automotive and industrial markets, and is the second-largest power chipmaker globally [10] - The company is transitioning to focus on emerging applications such as electric vehicles, autonomous vehicles, industrial automation, and renewable energy [10] Market Standing - Analysts have set an average price target of $56.0 for ON Semiconductor, with a consistent Equal-Weight rating from Morgan Stanley [12][13] - Current trading volume stands at 967,318, with the stock price at $54.34, reflecting a slight decrease of -0.41% [15]

Core Viewpoint - The article presents a perspective on stock investments, emphasizing the importance of unique insights and knowledge in identifying potential opportunities and risks in the market [1]. Company Analysis - The analyst holds a beneficial long position in ON shares, indicating confidence in the company's future performance [2]. - The article is based on the author's personal opinions and does not involve compensation from any company mentioned, ensuring an unbiased viewpoint [2]. Industry Insights - The analysis serves as an informational resource, highlighting the necessity for investors to conduct thorough personal research and due diligence before making investment decisions [3]. - The article underscores that past performance does not guarantee future results, which is a critical consideration for investors in the stock market [4].

Investment Rating - The report maintains a positive stance on the analog semiconductor sector, indicating a recovery in the automotive semiconductors market [2][7]. Core Insights - The automotive semiconductor market is projected to experience a revenue decline of -5% YoY in 2025E, an improvement from the previous estimate of -7% YoY, with a subsequent growth of +11.6% in 2026E [4][23]. - Analog revenue growth has returned to positive levels, with Q3'25 showing a 5% YoY increase, and expectations for Q4'25 to grow by 11% YoY [3][4]. - AI is emerging as a growth driver, contributing 5-10% of revenues, with significant increases in AI-related revenues anticipated for major players [5]. Summary by Sections Automotive Semiconductors - The automotive semiconductor revenue is expected to decline by -5% YoY in 2025E, improved from -7% previously, and is projected to grow by +11.6% in 2026E [4][23]. - China’s automotive semiconductor demand is forecasted to grow by 9% YoY in 2025E, down from 21% in 2024, indicating a normalization trend [6][28]. Analog Semiconductors - Analog revenue growth has shown positive momentum, with Q3'25 revenue up 5% YoY, and projections for Q4'25 to grow by 11% YoY [3][4]. - Industrial revenues are expected to grow by 10.8% YoY in 2025E, with a forecast of +14.5% YoY for 2026E [4]. AI and Growth Drivers - AI is becoming a significant growth driver, with major companies like Infineon and TI reporting substantial increases in AI-related revenues [5]. - Infineon anticipates AI revenue to rise from $860 million in FY'25E to $1.7 billion in FY'26E [5]. Regional Insights - The report indicates that while China’s growth is moderating, it remains a key market, with expectations of 6% growth in 2026E compared to 8% for non-China regions [6][28]. - Year-to-date, China’s car volumes grew 13% YoY, with NEV (New Energy Vehicle) volumes up 31% YoY [6]. Sector Preferences - The report highlights a preference for analog semiconductors, which are currently trading at approximately 20x P/E for 2026E, compared to a 10-year average of 19x [7]. - Preferred stocks include TI, IFX, and Renesas, while ON and Melexis are rated Neutral [7].

Core Viewpoint - Nasdaq announced changes to the Nasdaq-100 index, with six companies being added and six companies being removed, effective December 22 [1] Group 1: Companies Added - The following six companies will be added to the Nasdaq-100 index: - Enliven Therapeutics - Ferrovia Group - Insmed - Monolithic Power Systems - Seagate Technology Holdings - Western Digital [1] Group 2: Companies Removed - The following six companies will be removed from the Nasdaq-100 index: - Biogen - CDW - GlobalFoundries - Lululemon Athletica - ON Semiconductor - The Trade Desk [1]

Core Insights - ON Semiconductor has transformed into a focused power and sensing company, emphasizing silicon carbide and high-voltage power devices, aligning with sectors like EV powertrains and industrial automation [1] Company Positioning - ON Semiconductor occupies a unique position between large competitors like STMicroelectronics and Infineon and smaller players like Wolfspeed, benefiting from U.S.-based manufacturing and vertical integration in silicon carbide [3] Strategic Advantages - The U.S.-based manufacturing footprint provides ON with a strategic edge as supply chain security becomes a priority for governments and OEMs, aligning with EV policies and CHIPS Act incentives [4] - Onshoring reduces geopolitical risks for customers and enhances long-term supply assurance, which in turn strengthens ON's pricing power and OEM relationships [7] Financial Outlook - With a market cap of approximately $22.5 billion, ON is projecting revenues of $6.3 billion in 2026 and $7 billion in 2027, alongside $2.9 billion in cash and $800 million in debt [8] - The company has authorized $6 billion for buybacks, suggesting an effective enterprise value of around $13 billion by the end of 2027 [8] - ON is trading at nearly 2x 2027 price-to-sales after buybacks, with a forward P/E of about 20x, expected to drop to roughly 13x by 2027, indicating potential for multiple expansion through execution [8]

Core Viewpoint - Ansemic has announced a deepened long-term strategic partnership with Freya Hela to implement Ansemic's Power Trench T10 MOSFET technology across its advanced automotive platform, aiming to provide more efficient and cost-effective solutions for various automotive applications in response to the growing electrical demands driven by trends in autonomous driving, vehicle safety, and electrification [1] Group 1 - The partnership focuses on enhancing efficiency and cost-effectiveness in automotive applications [1] - The collaboration addresses increasing electrical demands due to trends in autonomous driving, vehicle safety, and electrification [1]

Core Insights - On Semiconductor Company (ON) is a key player in the AI revolution, developing essential power systems and technologies that support various applications, including electric vehicles and AI data centers [1][2] - The company reported a strong third quarter with $1.55 billion in revenue, marking a 6% increase from the previous quarter and a 38% adjusted gross margin [2] - ON's AI revenue is growing rapidly, nearly doubling year over year, and is projected to reach almost $250 million by 2025 [2] Group 1: Technology and Innovations - ON Semiconductor's Treo platform is expanding into automotive, industrial, and AI infrastructure, with a design funnel exceeding $1 billion [3] - The newly announced vertical GaN (vGaN) technology is expected to be a significant growth driver, offering greater operating voltages, faster switching, and up to a 50% reduction in energy loss [5] - Management claims that vGaN technology is well-suited for AI data centers, electric vehicles, renewable energy, aerospace, and defense [5] Group 2: Market Position and Growth - The company is experiencing stabilization in automotive and industrial markets, indicating a solid foundation for future growth [2] - Teledyne Technologies has selected the Treo platform for next-generation infrared imaging systems, highlighting ON's competitive edge in key verticals [4] - The company is already sampling its technologies with key automotive and AI customers, positioning itself as an early mover in the growing AI infrastructure market [5]

Core Insights - onsemi has extended its strategic engagement with FORVIA HELLA by adopting its PowerTrench® T10 MOSFET technology for advanced automotive platforms, enhancing collaboration for the next decade of automotive transformation [2][5] Company Collaboration - The long-term agreement between onsemi and FORVIA HELLA strengthens their partnership, focusing on delivering innovative solutions in the automotive sector [2][5] - This collaboration is built on a 25-year history, showcasing the trust FORVIA HELLA places in onsemi for next-generation power solutions [5] Technology Advancements - onsemi's PowerTrench® T10 MOSFET technology offers industry-leading efficiency with ultra-low conduction and switching losses, enabling higher power density in a compact design [3][6] - The T10 MOSFETs are produced at onsemi's advanced facility in East Fishkill, NY, and are designed to improve efficiency and reduce costs across various automotive applications [3][9] Market Trends - The partnership addresses the growing demand for efficient, compact, and cost-effective power systems as vehicle electrification accelerates [6][9] - By integrating onsemi's intelligent power solutions with FORVIA HELLA's automotive expertise, the collaboration aims to meet the increasing electrical demands of automated driving and electrification trends [6]

Group 1 - On Semiconductor's share rally from Q1 faced a setback in Q2 before the announcement of a $6 billion share buyback program [1] - The company is positioned in key sectors such as semiconductors, artificial intelligence, and cloud software, which are critical for growth [1] - The management's decision to initiate a significant share buyback indicates confidence in the company's future performance and aims to enhance shareholder value [1]

Core Insights - On Semiconductor's share rally experienced a significant decline in Q2 after a strong recovery from Q1, coinciding with the announcement of a $6 billion share buyback program [1] Company Overview - On Semiconductor is focused on growth within the technology sector, particularly in semiconductors, artificial intelligence, and cloud software [1] Market Context - The semiconductor industry is currently facing volatility, with On Semiconductor's stock performance reflecting broader market trends [1]