ON Semiconductor: “We Feel Good About the Second Half” — A Turning Point for SiC?
For over a year, onsemi (NASDAQ: ON) has managed through an uncertain SiC cycle, as global electric vehicle (EV) demand moderated, industrial orders softened, and inventories remained elevated. I first forecast this slowdown in my January 10, 2024 Seeking Alpha article entitled “Tracking A 2024 Slowdown In Silicon Carbide For EVs With Eyes On ON Semiconductor And Wolfspeed.”
But now, CEO Hassane El-Khoury has drawn a new line in the sand. Speaking at the Bank of America 2025 Tech Conference, he stated “We feel good about the second half.”
That simple statement signals a long-awaited turning point—not just for ON Semiconductor, but for the broader SiC supply chain that has been whipsawed by overcapacity, customer delays, and falling margins. El-Khoury's optimism, backed by facts and factory traction, comes at a time when silicon carbide is more vital than ever to next-generation EV platforms.
The Strategic Need for SiC in EVs
Silicon carbide power devices are critical to the shift from legacy silicon IGBTs to high-voltage, high-efficiency powertrains. In particular, 800V EV platforms depend on SiC for:
Lower conduction losses, enabling more efficient energy conversion.
Smaller inverters, improving space and weight efficiency.
Faster charging times, increasing range per charge and usability.
While SiC is costlier than silicon on a per-chip basis, it reduces total system cost by allowing OEMs to shrink battery sizes. This value proposition is strongest where the OEM controls both the inverter and battery—such as in China, where EV makers vertically integrate.
Quarterly Global EV Sales (2022–Q1 2025)
The most recent IEA data confirms continued EV growth through Q4 2024, led by China, with Europe and the U.S. contributing steadily. Q1 2025 saw a seasonal pullback, but unit volumes remain robust—confirming that demand exists for suppliers who can execute, as shown in Chart 1. Additional data on EVs and batteries areavaailable in my report at The Information Network entitled “Global and China EV Batteries and Materials: Technology, Trends and Market Forecasts.”
Chart 1
ON Semiconductor’s Outlook: Design Wins and Market-Specific Recovery
According to El-Khoury, ON Semiconductor is already capturing EV design wins that are entering production this year. These include both Chinese EVs observed at the Shanghai Auto Show and upcoming platforms in Europe and North America. The company’s ability to offer higher-efficiency SiC modules helps automakers reduce battery cost—key in regions where battery and inverter decisions are coordinated.
The CEO noted a bottoming in automotive and industrial demand in Q2 2025, and pointed to clear visibility on improvement for the second half. Inventory levels are in check, and ON’s vertically integrated SiC supply chain gives it the ability to ramp utilization faster than peers.
“EVs are still a growth market from a unit perspective… the growth in silicon carbide is not just tied to EV volume, but to SiC penetration in those vehicles.” — Hassane El-Khoury
SiC Device QoQ Revenue Change (Q1 2023 – Q1 2025)
In Chart 2, onsemi (green line) shows more stability than peers such as STMicro (blue), Rohm (gray), and Wolfspeed (yellow), and avoids the massive swings seen in X-FAB (red). While all suppliers faced pressure in early 2024, ON is among the first to show signs of positive sequential growth heading into Q1 2025, according to my report at The Information Network entitled “Power Semiconductors: Markets, Materials and Technologies.”