Escalating trade disputes between the United States and China have sent shockwaves through the semiconductor industry, with ON Semiconductor emerging as one of the most significant casualties during a volatile trading session. The company’s shares experienced a dramatic decline as geopolitical risks abruptly manifested in market valuations. This raises questions about whether the severe drop reflects more than temporary market anxiety.
Widespread Sector Decline
A broad-based selloff swept through chip stocks after former President Donald Trump threatened substantial tariff increases on Chinese goods, while planned discussions with Chinese President Xi Jinping appeared uncertain. These developments sent alarming signals through the globally interconnected semiconductor industry, triggering immediate reactions across financial markets.
During this sector-wide downturn, ON Semiconductor shares plummeted more than 8%, positioning the company among the hardest-hit equities. Competitors including ARM Holdings and Microchip Technology registered comparable losses as investors scaled back positions in companies with significant China exposure, fearing potential supply chain disruptions and expanding trade restrictions.
Institutional Investors Retreat
Beyond immediate market turbulence, a longer-term pattern is emerging among major investors. Swiss firm Vontobel Holding slashed its stake in ON Semiconductor by 63.5% during the second quarter of 2025. This substantial reduction by an institutional investor highlights growing skepticism regarding geopolitical risks within the technology sector.
Should investors sell immediately? Or is it worth buying ON Semiconductor?
This investor caution comes despite ON Semiconductor’s aggressive growth initiatives. The company recently announced its acquisition of Vcore Power Technologies in late September to strengthen its artificial intelligence data center business. This follows its January purchase of Qorvo’s silicon carbide division, demonstrating strategic determination to expand in key technologies despite challenging market conditions.
Quarterly Results in Focus
Market attention now turns to ON Semiconductor’s upcoming quarterly report, scheduled for release in late October. Financial analysts project adjusted earnings of $0.59 per share. The consensus recommendation among experts remains “Hold” with an average price target of approximately $57—significantly above current trading levels.
The critical question facing investors is whether ON Semiconductor can leverage the structural growth momentum from its recent acquisitions to weather the ongoing geopolitical storms. The coming days will reveal whether the recent share price collapse represents temporary market panic or the beginning of a more sustained downward trend.
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