onsemi at technology leadership forum 2026: ai power push builds

On Tuesday, 11 August 2026, ON Semiconductor (ON) presented its business strategy at the Technology Leadership Forum 2026. The company highlighted its growing presence in AI data center power systems while dealing with a temporary shift in capacity from automotive and industrial markets. Management reported improved margins, better visibility, and a bigger strategic role in power conversion. CEO Hassane El-Khoury and CFO Thad Trent emphasized the company's stronger operating base and balanced demand.

ON's AI data center revenue more than doubled from $250 million in the prior year to over $500 million this year, surpassing its initial expectation of doubling. The company's stock, valued at $31.5 billion with a P/E ratio of 52.19, appears potentially undervalued despite its strong performance. Factors supporting gross margin growth over the next 6 to 12 months include input cost pressure alleviated by price increases, with further benefits expected to materialize in several quarters.

In response to demand, ON temporarily prioritized data center orders over automotive and industrial ones. However, this shift was described as an operational adjustment rather than a long-term strategy. El-Khoury explained the company's flexible manufacturing system, which allows wafer and in-process wafer redirection between end markets until about two weeks before a product receives its marketing part number.

Automotive demand has not shown a significant restocking cycle, and some original equipment manufacturers are buying directly from ON, reflecting concerns about inventory levels and balance-sheet pressure at tier-one suppliers.

ON's vertical gallium nitride program is progressing, with a high-voltage, 1,200-volt monolithic device already sampled to AI data center and automotive customers. The technology is expected to qualify as planned, with yield and performance meeting internal expectations. The company is participating in the full AI data center power conversion spectrum, from high to low voltage, across various customers and platforms, including Flex Power, Delta, Lite-On, Great Wall, AWS, and Nvidia.

Management focused on the strategic importance of the Synaptics acquisition, framing it as an expansion from a position of strength, rather than a response to weakness in the core business. CFO Thad Trent projected the transaction to be accretive to gross margin and cash flow positive, with expected synergies of $200 million within 18 months of closing.

Expected benefits will stem from manufacturing integration, distribution leverage, and revenue growth beyond that period. Management anticipates continued margin expansion through the next several quarters as utilization gains flow through the income statement and pricing actions take hold. ON also noted improved customer visibility extending into 2027 and early 2028 through backlog commitments.