Onsemi Overview

Onsemi

Introduction

Onsemi is a semiconductor supplier company in the United States of America founded in the year 1999, meaning the company has existed for over 23 years. The company is based in Phoenix, Arizona, United States. The company is ranked #483 of 500 on the 2022 Fortune 500 based on its sales in 2021. On semiconductor runs a network of manufacturing facilities, sales offices, and design centers in North America, Europe, and the Asia Pacific regions, the company is ranked among the top 20 semiconductor sales leaders worldwide. The company is run by the following:

· Hassane El-Khoury as the President and CEO,

· Alan Campbell as the Chairman,

· Thad Trent as the Executive VP and CFO.

However, it will interest you to know that On Semiconductor has a revenue of US$6.74 billion, Operating Income of US$1.29 billion, Net income of US$1.01 billion, total assets of US$9.63 billion, total equity of US$4.59 billion and over 30 thousand employees all as of 2021. The company’s products include:

· Intelligent power and sensing technologies,

· Logic, discrete, clock, and data distribution

· Power management: AC/DC Controllers, Convertors, and Regulators.

· Signal Management: Amplifiers and Comapator; Analog Switches.

· Custom: ASICs; Custom Foundry Services; Custom ULP Memory; Custom CMOS image Sensors; Integrated passive devices.

Moreover, Onsemi originally was a spinoff of Motorola’s Semiconductor Components Group. The company continues to manufacture Motorola’s discrete, standard logic, and standard analog devices. The company also announced that Belgian Group BV from the onsemi group. On Semiconductor has many acquisitions, some of which are:

· Acquisition of Cherry Semiconductor in April 2000.

· Acquisition of TESLA SEZAM (manufacturer of semiconductor chips) and TEROSIL in 2003.

· Acquisition of LSI Logic Gresham, Oregon Design and Manufacturing Facility in 2006.

· Acquisition of the CPU Voltage and PC Thermal Monitoring Business from Analog Devices, Inc., for $184 million in January 2008.

· Acquisition of AMI Semiconductor for $915 million in March 2008.

· Acquisition of Catalyst Semiconductor, Inc., for $114 million on July 17, 2008.

· Acquisition of PulseCore for $17 million in November 2009.

· Acquisition of California Micro Devices in December 2009.

· Acquisition of Sound Design Technologies, Ltd., for $22 million in June 2010.

· Acquisition of Quantenna Communications for about $1 billion in June 2019, later on, it was reported by Bloomberg News that the company was looking to sell off Quantenna’s assets.

· In April 2019, the company acquired GlobalFoundries 300mm Fabrication Facility in East Fishkill, New York.

· In August 2021, the company acquired GT Advanced Technologies.

The name of the company was also changed from “On semiconductor” to “onsemi” in its plans to expand its reach in the industrial and automotive markets and achieve net-zero emission by 2040, the change was done on August 17, 2021.

Furthermore, Onsemi is known to have three segments listing:

· Advanced Solutions Group (ASG)

· Intelligent Sensing Group (ISG)

· Power Solutions Group (PSG)

These segments run simultaneously and ensure Onsemi’s growth.

The company has also won several awards some of which are:

· The Hot 100 Electronic products of 2009 and 2012 by EDN magazine

· The IR Magazine U.S Awards in the three fields in 2012

· The World’s Most Ethical Companies by Ethisphere Institute in 2016, 2017, 2018, 2019, 2020, 2021, and 2022.

Another interesting fact is that onsemi is a partner with lots of companies, here is a partner list:

· Amazon Web Services (4618 partners)

· Arrow Electronics (416 partners)

· NVIDIA (238 partners)

· Panasonic (76 partners)

· Avnet (50 partners)

· Xilinx (35 partners)

· E2Open (32 partners)

· Jabil (17 partners)

· Mercedes-Benz (15 partners)

· Algolux (14 partners)

· Sigfox (10 partners)

· Quuppa (4 partners)

· Geniatech (3 partners)

· Verdify Security ( 2 partners)

· Blickfeld (1 partner)

· OLogic (1 partner)

· Lumentum (1 partner)

· DSR Corporation (1 partner)

· WISeKey (1partner)

· SOS LAB (1 partner) and more.

Down to the review of this company by its customers and employees, the company has a rating of 3.8 out of 5 points which is a plus in the company’s name, customers appraise the company for its products and great services, although, some employees complained of salary cut in times of crises, the employees also complained of laziness among other employees, while other employees praised the company pointing out the productive and enjoyable environment.

Lastly, the company also has new products which would be launched at the end of 2022, some of which are:

· Vision; to be launched on October 6, 2022.

· Electronica; to be launched November 18, 2022.

· International Suppliers Fair (IZB); to be launched on October 13, 2022

And many more

There are several Solution Engineering Centers (SEC) and Design Centers around the world.

Solution engineering centers

· United States: San Jose, California; Portland, Oregon; Detroit, Michigan; Nampa and Meridian, Idaho

· Germany: Munich

· South Korea: Seoul

· China: Shanghai, Shenzhen

· Taiwan: Taipei

· Japan: Osaka, Tokyo

· Slovakia: Piešťany

Design centers

· United States: Phoenix, Arizona; Santa Clara, California; Sunnyvale, California; Longmont, Colorado; Pocatello, Idaho; Lower Gwynedd, Pennsylvania; East Greenwich, Rhode Island; Austin, Texas; Plano, Texas; Lindon, Utah; South Portland, Maine; Bedford, New Hampshire

· Canada: Burlington; Waterloo

· Belgium: Mechelen; Oudenaarde

· Czech Republic: Brno; Rožnov pod Radhoštěm

· France: Toulouse

· Germany: Munich

· Ireland: Limerick

· Romania: Bucharest

· Slovakia: Bratislava

· Switzerland: Marin; Dübendorf

· India: Bangalore

· Israel: Haifa

· Japan: Aizu; Gifu; Gunma

· South Korea: Seoul; Bucheon

· Philippines: Tarlac City

· Taiwan: Hsinchu

· Australia: Epping, New South Wales

· Russia: Saint Petersburg

Manufacturing facilities

Manufacturing facility in Carmona, Philippines

· Canada: Burlington

· United States: Pocatello, Idaho; South Portland, Maine; Mountain Top, Pennsylvania; Gresham, Oregon; Nampa, Idaho; Rochester, New York; Fishkill, New York (in the process)

· Belgium: Oudenaarde (for sale)

· Czech Republic: Rožnov pod Radhoštěm

· China: Leshun; Shenzhen; Suzhou

· Japan: Gunma; AIZU; Niigata (exploring sale)

· Malaysia: Senawang, Negeri Sembilan (2 Plants)

· South Korea: Bucheon

· Philippines: Carmona; Tarlac City; Cebu

· Vietnam: Thuan An, Binh Duong; Bien Hoa, Dong Nai

Over the past two years, there has been a huge demand for electronic and automotive products among the people, which is posing a huge challenge to the global chipmakers to meet the same. The massive growth of the Internet of Things (IoT), artificial intelligence (AI), and the current augmenting demand from high-tech industrial sectors and the IT hardware industry would proffer more barriers to the supply chain of semiconductors. With the outbreak of the global coronavirus pandemic, the supply chain of semiconductors has already been disrupted, which has further impacted the production scale of chipsets. Now, the recent Russian and Ukraine border scuffle has put another challenge on the semiconductor industry because 90 percent of the USA’s semiconductor grade neon is produced by Ukraine. This gas is imperative for the lasers utilized in chipset manufacturing. While on the other hand, Russia provides around 35 percent of the US’s palladium supply. On the one hand, they have started witnessing an improvement in this sector, but on the other hand, new challenges are now disturbing the sector.

They are very bullish about what we want to achieve in the next five years. Over the next three years, they’ll use new product engines to fuel 2025/26 and beyond. They need the capacity to support that growth and that comes with LTSAs with key customers. As they execute, they will see our war chest grow. Our desire to drive disruptive change will shape our manufacturing footprint and capital investments. They want to be as efficient as possible and ensure that customers can rely on our manufacturing footprint. They will continue executing our fab-liter strategy to reduce our fixed cost structure and overall unit costs across the portfolio as we exit subscale fabs over a multi-year period.

They have multi-year visibility on our silicon carbide LTSAs that will get us to exit 2023 with a $1 billion run rate. We have already started ramping up our efforts and will continue to do so heavily in the second half of 2022, which will be 2x more than what it was in 2021. By optimizing our manufacturing network, onsemi will eliminate fixed costs and lower its unit costs driving long-term and sustained gross margin expansion while ensuring a consistent supply of products to our customers. As they implement these efforts to optimize our fab-liter manufacturing strategy, they carefully analyze it and where there is a need for expansion.

Onsemi’s products are highly differentiated and require specialized manufacturing; they cannot be obtained through foundries. Therefore, their customers would be unable to independently manufacture the caliber chips we supply them.

Their focus is to look at what we need to do for capacity to get there. It’s not as easy as just investing in technology. As they continue to see the high growth of megatrends such as vehicle electrification, advanced safety, and alternative energy, the biggest impact we can have is through our power devices, such as silicon carbide MOSFETs, to ensure maximum energy transfer from the battery to wheels. They are confident that our high-growth and strategic markets will enable us to drive disruptive innovation and create game-changing solutions irrespective of the competitor landscape.