ON Semiconductor Corp.

Financial Performance: Onsemi reported Q1 2025 revenue of $1.45 billion, with non-GAAP earnings per share of $0.55, both exceeding guidance expectations. However, this represented a 26% sequential decline in automotive revenue and a 4% decline in industrial revenue. Non-GAAP gross margin fell to 40%, down 530 basis points sequentially, influenced by lower revenue and manufacturing under-absorption.

Market Outlook: The company is cautiously optimistic about recovery in end markets, especially in industrial segments showing signs of stability. Automotive revenue, which heavily relies on EV adoption, particularly in China, is poised for growth as Onsemi expects to penetrate 50% of new EV models introduced.

Strategic Initiatives: Onsemi is implementing a "Fab Right" strategy to streamline operations and minimize costs. This includes a 12% reduction in internal fab capacity and a company-wide restructuring resulting in a 9% workforce reduction, anticipated to generate $30 million in savings by Q2. These initiatives aim to improve gross margins and free cash flow.