ON Semiconductor Corp

ON: XNAS (USA)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	$98.00	Fbwqdc	Rjxyxmxz

Onsemi Earnings: Automotive and Silicon Carbide Sales Drive Strength as Margin Headwinds Persist

William Kerwin

May 1, 2023

We maintain our $74 per share fair value estimate for narrow-moat Onsemi after it reported first-quarter results and second-quarter guidance lightly above our expectations. The firm's focus on the automotive and industrial markets continues to generate strong results, and we remain impressed by its progress ramping silicon carbide, or SiC. Onsemi is fending off several headwinds to profitability, but we think its margins are holding up quite well. Overall, we see 2023 as a transitory year with some pockets of weakness, but view Onsemi as strongly positioned for long-term profitable growth. We see shares as fairly valued.

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