ON Semiconductor (ON) Stock Has The Rally Run 17% Ahead Of Fair Value? - simplywall.st

ON Semiconductor (ON) has shown strong stock performance, with a 1-year total shareholder return of 130.25% and a 90-day return of 105.23%, indicating significant investor interest. However, its curre... Read original →

ON Semiconductor’s stock is pricing in overly optimistic SiC adoption curves, risking a valuation correction if 8-inch wafer yields fail to exceed 70% by 2027. This directly impacts power delivery reliability for NVIDIA’s GB200 and AMD’s MI300X AI platforms. Geopolitically, delayed CHIPS Act disbursements and the EU’s new wide-bandgap localization mandates are inflating compliance costs at its Arizona and Czech fabs. STMicroelectronics is countering via joint 6-inch SiC development with Sanan Optoelectronics, while Infineon secures 3nm automotive BCD capacity through foundries in Taiwan, China. Unless ON boosts SiC fab utilization beyond 80% within 18 months—up from today’s 55%—its premium will evaporate. Investors should pivot toward AI power management firms co-optimizing with EUV lithography ecosystems.