ON Semiconductor Corp.

Q2 performance beat guidance; strong profitability + cash return - Revenue $1.6B, +9% YoY and +6% QoQ, above the midpoint of guidance; AI data center was the key demand driver. - Non-GAAP gross margin 39.3% (+80 bps sequentially), and non-GAAP EPS $0.74. - Free cash flow $425M in Q2; $332M share repurchases; ~105% of free cash flow returned to shareholders YTD.

Demand recovery visible, with supply tightening + prioritization decisions - Management cites a healthy recovery: strengthening signals include orders within lead time and customer escalations. - Lead times extended from ~27 weeks to ~32 weeks on average; this implies rising backlog/visibility. - Because supply lagged accelerating demand, they prioritized shipments to AI data center over automotive/industrial in Q2; expect normalization as supply catches up in Q3/Q4.

Major upside forecast: AI data center to more than double in 2026 - Company now expects AI data center revenue to >2x in 2026 (vs 2025). - Expanded partnership footprint: broader role in NVIDIA MGX ecosystem (advanced power systems) + 2 platform wins with Great Wall (China cloud/AI). - Product/content expansion across the “Power Tree,” including silicon carbide: AI data center silicon carbide revenue expected to grow ~60% YoY in 2026 (high-voltage architectures, including 800V DC distribution).