Chipmaker ON Semiconductor on Monday forecast higher-than-expected third-quarter revenue amid optimism that strong demand from the auto industry will offset overall weakness in the semiconductor industry. Shares of the Arizona-based company were up more than 3.4 percent at $108.68 by midday U.S. time, and have risen 68.5 percent so far this year.
The growing popularity of electric vehicles has been a boon for chipmakers such as Onsemi and NXP Semiconductors. Onsemi said in May it was considering investing more than $2 billion to ramp up production of silicon carbide chips to extend the range of electric vehicles.
Onsemi is considering building new plants at existing sites in South Korea, the United States and the Czech Republic.
ON Semiconductor CEO Hassane El-Khoury said in an interview before that the company's silicon carbide chip production is currently concentrated at one of its factories in Bucheon, South Korea. The company plans to look for an "end-to-end" production method, which means, in short, that no matter which production site it chooses, it can turn raw silicon carbide powder into chips.
Hassane El-Khoury told Reuters the company is open to building brand new factories if demand continues to rise. But at the same time, using existing sites will help bring the margins of the silicon carbide business in line with broader corporate margins, even after factoring in spending to expand production.
"Currently (the existing site) is the way to go and we pay for it with operating cash flow," El-Khoury told Reuters.
Auto chip maker NXP last week forecast strong third-quarter revenue and profit, showing confidence in stabilizing auto demand.
Onsemi, which makes sensors and supplies chips to companies including Volkswagen (VOWG_p.DE), expects third-quarter revenue of between $2.1 billion and $2.2 billion. Analysts on average expected revenue of $2.07 billion, according to Refinitiv IBES data.
Revenue rose to $2.09 billion in the second quarter ended June 30, topping analysts' forecast of $2.02 billion. Onsemi's Power Solutions Group, which provides power management chips and accounted for about 53% of total quarterly revenue, drove the top line growth. On an adjusted basis, the company earned $1.33 a share in the reported quarter, compared with expectations for $1.21 a share, according to Refinitiv data.
It is worth mentioning that, according to Hassane El-Khoury's disclosure in the first quarter earnings conference call, ON Semiconductor's accelerated silicon carbide manufacturing output exceeded the company's internal plan, making its silicon carbide revenue nearly double from the previous quarter, and The company's ADAS and energy infrastructure revenue grew about 50% year-over-year. According to relevant report survey statistics, as shown in the figure, STMicroelectronics has the largest market share, but the real growth in 2022 will come from ON Semiconductor, whose market share has more than doubled.
According to ON Semiconductor's expectations, by 2027, its own SiC market share will increase to 40%. The company predicts that the SiC market will expand at a compound annual growth rate of 10-12%, with sales climbing to $13.9 billion from $8.3 billion last year. In addition, ON Semiconductor hopes to increase its cash flow to $3.5 billion by 2027 from $1.6 billion last year.
The ability to have such an ambition is due to the technological progress of onsemi.
In May today, Onsemi revealed that the company is developing silicon carbide MOSFETs with a trench structure instead of a planar structure, and samples are expected to be available later this year and are expected to be available in 2024.
The company has a silicon carbide epitaxial fab near Brno, Czech Republic, and a fab in South Korea for device fabrication. The turn-trench structure allows more devices to be built on a 150mm (6-inch) wafer, reducing device cost. The company also has an engineering program for 200mm (8-inch) SiC wafer production.
This follows ON Semiconductor's latest generation of 1200 V EliteSiC M3S devices with reduced on-resistance. These products target 800 V electric vehicle (EV) on-board chargers (OBC) and energy infrastructure applications such as EV charging, solar and energy storage systems.
EliteSiC M3S devices are also used in half-bridge power integrated modules (PIMs) with low Rds(on) in a standard F2 package. Targeted at industrial applications, the module is well suited for DC-AC, AC-DC and DC-DC high power conversion stages. They offer a higher level of integration through an optimized direct-bonded copper design for balanced current sharing and thermal distribution between paralleled switches. PIMs are designed to provide high power density for energy infrastructure, DC fast charging for electric vehicles and uninterruptible power supplies (UPS).
"onsemi's latest generation of automotive and industrial EliteSiC M3S products will enable designers to reduce their application footprint and system cooling requirements," said Asif Jakwani, senior vice president and general manager of the Advanced Power Division at onsemi. "This helps designers develop high-power converters with higher efficiency and higher power density."
The automotive-qualified 1200 V EliteSiC MOSFETs are tailored for high-power OBCs up to 22 kW and high-voltage to low-voltage DC-DC converters. M3S technology was developed specifically for high-speed switching applications.
About ON Semiconductor：
ON Semiconductor (Nasdaq: ON) is driving energy efficient innovations, empowering customers to reduce global energy use. The company offers a comprehensive portfolio of energy efficient power and signal management, logic, discrete and custom solutions to help design engineers solve their unique design challenges in automotive, communications, computing, consumer, industrial, LED lighting, medical, military/aerospace and power supply applications. ON Semiconductor operates a responsive, reliable, world-class supply chain and quality program, and a network of manufacturing facilities, sales offices and design centers in key markets throughout North America, Europe, and the Asia Pacific regions.
ON Semiconductor product recommendation：
- RFID, RF Access, Monitoring ICs
- Special Purpose
- Specialized ICs
- Specialized Sensors
- Surge Suppression ICs
- Temperature Sensors - Analog and Digital Output
- Temperature Sensors - NTC Thermistors
- Temperature Sensors - Thermostats - Solid State
- Thyristors - DIACs, SIDACs
- Thyristors - SCRs
- Thyristors - TRIACs
- Transistors - Bipolar (BJT) - Arrays
- Transistors - Bipolar (BJT) - Arrays, Pre-Biased
- Transistors - Bipolar (BJT) - RF
- Transistors - Bipolar (BJT) - Single
- Transistors - Bipolar (BJT) - Single, Pre-Biased
- Transistors - FETs, MOSFETs - Arrays
- Transistors - FETs, MOSFETs - RF
- Transistors - FETs, MOSFETs - Single
- Transistors - IGBTs - Modules
- Transistors - IGBTs - Single
- Transistors - JFETs
- Transistors - Programmable Unijunction
- Transistors - Special Purpose
- TVS - Diodes
- TVS - Mixed Technology
- TVS - Thyristors