ON Semiconductor Corporation (ON) Stock Analysis

ON Semiconductor’s competitive edge is anchored in its leadership in power semiconductors and automotive image sensors, underpinned by vertical integration and a broad, high-quality product portfolio. ON is the world’s second-largest power chipmaker and the leading supplier of image sensors to the automotive market, with a 60–80% share in advanced driver-assistance systems (ADAS). Its silicon carbide (SiC) business is a particular strength: ON is one of only a few players with end-to-end SiC manufacturing, from raw material (boules) to finished modules, supporting both cost control and supply reliability. Management targets a 35–40% SiC market share, outpacing the industry’s 33% CAGR (2022–27).

Compared to peers such as Infineon, STMicroelectronics, and Wolfspeed, ON’s vertical integration reduces dependence on third-party suppliers—a key advantage amid supply chain volatility. Its ability to offer both silicon and SiC solutions across a wide voltage range allows it to serve diverse customer needs, often winning business for both front and rear axles in electric vehicles.

ON’s customer relationships are sticky: the top 20 customers account for ~40% of revenue, each buying around 600 products on average. High switching costs, reliable delivery, and a reputation for quality further reinforce its position. However, the company faces intense competition and must continually invest in innovation to defend its share.