The Real Downturn Risk In ON Semiconductor Stock - Trefis

This article delves into the historical performance and potential risks of ON Semiconductor (ON) stock during market downturns. While the company is showing strong growth in AI data centers with quart... Read original →

Despite ON Semiconductor’s >30% quarterly revenue surge from AI data centers, its reliance on mature nodes leaves it excluded from the 3nm/EUV ecosystem, weakening its leverage over upstream equipment and materials. Any tightening of EUV export controls—particularly from the U.S.—could indirectly inflate its advanced packaging costs. More critically, stagnant automotive demand reveals structural fragility: legacy MCUs and power devices underperform, while automotive SiC hasn’t yet scaled profitably. With Infineon and STMicroelectronics rapidly expanding 8-inch SiC fabs, ON must lift gross margins above 45% by 2027 or risk exclusion from premium supply chains. A global 'growth scare' in the next 12–18 months wouldn’t trigger a black swan but a historically consistent ~70% drawdown. Treat ON as a high-beta tactical position—not a core holding.