Why I’ve Begun Accumulating ON Semiconductor - 24/7 Wall St.

ON Semiconductor (ON) has emerged as a compelling play in the power semiconductor space, driven by strong demand in AI data centers, electric vehicles, and grid-scale energy storage. In Q2 2026, AI da... Read original →

ON Semiconductor is capitalizing on the surge in AI data centers and electric vehicles to redefine the power semiconductor landscape. Strategic wins in NVIDIA MGX, AWS power designs, and Rivian R2 platform have solidified its position in high-end power devices. As AI data center revenue per rack climbs from $15K to $115K by 2030, the total addressable market expands from $12B to $50B, driving free cash flow to $425.4M and gross margins to 40–42%. Despite a high trailing P/E of ~262, strong book-to-bill ratios and lead times reflect robust demand and capacity constraints. With U.S.-China tech decoupling intensifying, ON’s localized supply chain and diversified customer base mitigate geopolitical risks. Competitors like TI and Wolfspeed must accelerate investments in SiC and AI compute chips to avoid losing ground. Over the next 12–24 months, the power semiconductor segment will face capacity bottlenecks, positioning ON to gain further market share through its technological moat.