Q3 2024 ON Semiconductor Corp Earnings Call Transcript
Key Points
- ON Semiconductor Corp (ON) reported revenue, gross margin, and earnings per share above the midpoint of their guidance, demonstrating strong execution and operational excellence.
- The company saw sequential growth in silicon carbide revenue, driven by utility-scale solar and share gains in China's battery electric vehicles (BEVs).
- ON Semiconductor Corp (ON) has qualified its 200-millimeter M3 silicon carbide ahead of schedule, with 8-inch wafers running in the fab at 350-micron thickness, showing strong technological advancement.
- The company's Intelligent Sensing business grew 11% quarter over quarter, with strength in advanced driver-assistance systems (ADAS) and industrial imaging.
- ON Semiconductor Corp (ON) has secured design wins with three of the top four hyperscalers in North America, expected to contribute to revenue in 2025, indicating strong future growth potential in the data center market.
- The demand environment remains muted with ongoing inventory digestion and slow end demand, particularly in the automotive and industrial sectors.
- Automotive revenue was down 18% compared to the third quarter of 2023, despite sequential growth driven by silicon carbide and ADAS image sensors.
- Revenue for the Industrial segment decreased 6% sequentially and 29% year over year, with traditional industrial markets remaining relatively stable but not recovering broadly.
- ON Semiconductor Corp (ON) does not expect meaningful market growth for the full year 2024, with silicon carbide revenue projected to grow only in the low- to mid-single digits over 2023.
- The company is facing challenges with inventory management, as inventory increased by $18 million sequentially, and distribution inventory is expected to increase to 10 weeks plus or minus in Q4.
Good day, and thank you for standing by. Welcome to the onsemi third quarter 2024 earnings conference call. (Operator Instructions) Please be advised that today's conference is being recorded. I would now like to hand the call over to Parag Agarwal, Vice President of Investor Relations and Corporate Development. Please go ahead.
Thank you, Tanya. Good morning and thank you for joining onsemi's third quarter 2024 quarterly results conference call.
I am joined today by Hassane El-Khoury, our President and CEO; and Thad Trent, our CFO. This call is being webcast on the Investor Relations section of our website at www.onsemi.com. A replay of this webcast, along with our 2024 third quarter earnings release, will be available on our website approximately 1 hour following this conference call, and the recorded webcast will be available for approximately 30 days following this conference call.
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