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    Is ON Semiconductor’s (ON) InnoScience GaN Deal a Subtle Shift in Its Power-AI Strategy?

    Simply Wall St·12/09/2025 22:17:35
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    • InnoScience (Suzhou) Technology Holding Co., Ltd. recently announced a cooperation with onsemi to combine its 8-inch GaN-on-silicon manufacturing with onsemi’s packaging and system integration strengths, aiming to accelerate GaN deployment in areas such as new energy vehicles, AI, data centers and industrial applications, with the partnership expected to generate hundreds of millions of US dollars in future GaN sales.
    • This agreement highlights how onsemi is deepening its exposure to wide bandgap power technologies, potentially reinforcing its position in higher-value, energy-efficient semiconductor markets.
    • We’ll now consider how this GaN-focused cooperation with InnoScience might influence onsemi’s existing investment narrative centered on power and AI markets.

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    ON Semiconductor Investment Narrative Recap

    To own onsemi, you need to believe in its shift toward higher value power and AI semiconductors, with wide bandgap technologies as a key pillar. The new GaN partnership with InnoScience fits this story, but does not immediately resolve the near term margin pressure from softer auto demand, underutilized fabs, and the revenue drag from exiting legacy businesses.

    The most relevant recent announcement alongside this GaN news is onsemi’s Q3 2025 update, which showed year over year revenue and earnings declines despite ongoing portfolio rationalization. That context matters because the InnoScience cooperation speaks to the company’s attempt to lean harder into higher margin GaN and power solutions just as it is absorbing weaker utilization and transitioning away from lower margin lines.

    Yet while GaN could support the mix shift investors are hoping for, they should also be aware of the risk that...

    Read the full narrative on ON Semiconductor (it's free!)

    ON Semiconductor's narrative projects $7.5 billion revenue and $1.9 billion earnings by 2028. This requires 5.4% yearly revenue growth and an earnings increase of about $1.4 billion from $465.8 million today.

    Uncover how ON Semiconductor's forecasts yield a $58.70 fair value, a 4% upside to its current price.

    Exploring Other Perspectives

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    Simply Wall St Community members place onsemi’s fair value between US$49.59 and US$70 across 11 independent views, underlining how far opinions can stretch. Against that diversity, the company’s push into GaN and other wide bandgap power products is a key factor many readers may want to weigh when thinking about onsemi’s longer term earnings potential and resilience.

    Explore 11 other fair value estimates on ON Semiconductor - why the stock might be worth 12% less than the current price!

    Build Your Own ON Semiconductor Narrative

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.