“We remain committed to executing on our silicon carbide strategy. While market softness affected Q1 results, we are confident that SiC will be our engine of growth as EV and industrial markets rebound,” said Hassane El-Khoury, President and CEO of Onsemi.
With a 22% revenue drop in Q1 2025, Onsemi accelerates its silicon carbide strategy and sharpens operational focus to drive long-term growth across the electric vehicle and industrial sectors.
Q1 2025 Financial Performance: Onsemi Navigates a Tough Quarter
Onsemi reported a 22% year-over-year decline in revenue, closing Q1 2025 at $1.45 billion. The performance dip was primarily due to lower factory utilization rates and pressure on average selling prices (ASPs), affecting the company’s margins and bottom line.
Key Financial Highlights
- Revenue: $1.45 billion (down 22% YoY)
- GAAP Gross Margin: 20.3%
- Non-GAAP Gross Margin: 40.0%
- GAAP Operating Margin: -39.7%
- Non-GAAP Operating Margin: 18.3%
- Net Loss: $486.1 million
Despite this downturn, American semiconductor supplier company maintains a clear focus on expanding its strategic portfolio in silicon carbide (SiC), an area with high growth potential due to increasing EV and renewable energy demand.
Silicon Carbide (SiC): The Cornerstone of Onsemi’s Future
Why SiC Matters in 2025 and Beyond
Silicon carbide (SiC) semiconductors offer superior efficiency in high-voltage, high-power environments, making them essential for:
- Electric vehicles (EVs)
- EV charging infrastructure
- Industrial automation
- Solar and renewable energy systems
- With legacy silicon devices nearing their performance limits in these sectors, SiC is expected to be a $20 billion global market by 2030, and Onsemi is actively positioning itself as a leader.
Recent Investments in SiC
Onsemi has doubled down on its SiC roadmap with:
- 8-inch SiC wafer production scaling to meet EV market demands
- Multi-billion dollar supply agreements with global EV manufacturers
- Expanded fab capacity in the Czech Republic and South Korea
Hassane El-Khoury, President and CEO of Onsemi, remarked:
“We remain committed to executing on our silicon carbide strategy. While market softness affected Q1 results, we are confident that SiC will be our engine of growth as EV and industrial markets rebound.”
Operational Restructuring: Cutting Costs, Focusing Growth
To respond to current headwinds, Onsemi has launched a series of efficiency-driven initiatives:
1. Portfolio Optimization
The company is exiting non-core product lines and refocusing engineering and capital resources toward high-growth verticals such as:
- Automotive electrification
- Industrial power solutions
- Intelligent sensing platforms
2. Manufacturing and Cost Controls
Operational restructuring includes:
- Streamlined fab operations to boost productivity
- Cost-cutting in underutilized business segments
- Better inventory management to reduce working capital pressures
El-Khoury emphasized that “cost discipline and manufacturing agility” will be vital as the company seeks to rebound in H2 2025.
Q2 2025 Outlook: Early Signs of a Turnaround
Despite Q1 turbulence, Onsemi forecasts Q2 2025 revenue between $1.40 billion an $1.50 billion, with expectations that:
- Electric vehicle semiconductor demand will stabilize
- Industrial recovery in Asia-Pacific will support new orders
- Gross margins will improve due to better fab utilization and supply-demand balance
Projected Q2 Non-GAAP EPS: $0.48 – $0.58
This signals a potential bottoming out of the current downcycle, with moderate recovery in sight.
Market Drivers: Electric Vehicles, Renewable Energy, and Industrial Automation
EV Demand Remains Resilient
While global EV growth has slightly slowed, key automakers continue to invest in next-gen vehicle platforms powered by SiC-based traction inverters and onboard chargers. Onsemi’s multi-year SiC deals with brands like Tesla, Hyundai, and BMW reflect strong long-term visibility.
Industrial and Energy Sectors Offer Tailwinds
As factories digitize and governments push for decarbonization, demand for efficient power semiconductors is surging in:
- Battery energy storage systems (BESS)
- Solar power inverters
- Robotics and automation platforms
These secular trends will play a pivotal role in Onsemi’s post-2025 revenue trajectory.
Leadership Vision: Long-Term Value Creation
In Onsemi’s earnings call, CEO El-Khoury stated:
“We are not managing for a single quarter. We are building a platform to lead the power semiconductor transition in a world that demands more energy-efficient solutions.”
The company is focused on:
- Securing long-term wafer supply chains
- Enhancing design wins in 800V EV platforms
- Driving double-digit SiC revenue growth YoY
Onsemi’s C-suite is also prioritizing AI integration across its supply chain for predictive analytics, yield optimization, and faster product cycles.
Analyst View: Is Onsemi Undervalued?
While Q1 results disappointed Wall Street, some analysts see an opportunity.
“If you believe in the EV and renewables story, Onsemi is worth a long look,” said Raymond James analyst Chris Caso. “It’s trading at a discount to peers like Wolfspeed and STMicro, despite having competitive SiC technology and strong automotive partnerships.”
Onsemi’s SiC-Fueled Strategy May Outrun the Downcycle
Onsemi Q1 2025 may have been a setback, but American semiconductor supplier company is playing the long game.
With bold investments in silicon carbide, strategic exits from low-margin businesses, and a laser focus on core growth drivers, the company is well-positioned for a recovery in late 2025 and strong momentum into 2026.
