ON Semiconductor is making a decisive move to position itself for future expansion, launching an ambitious financial strategy that combines substantial capital investment with significant shareholder returns. While recent quarterly results reveal some operational headwinds, the semiconductor specialist is aggressively pursuing growth in next-generation markets through a dual-pronged approach of manufacturing expansion and equity repurchases.
Share Repurchase Program Signals Confidence
The company’s board of directors has authorized a substantial $6 billion stock buyback initiative scheduled to commence on January 1, 2026. This new program replaces the previous $3 billion repurchase plan, under which ON Semiconductor had already bought back approximately $2.1 billion worth of its own shares over the preceding three-year period. The scale of this authorization represents a strong vote of confidence from management in the company’s long-term prospects.
European Silicon Carbide Facility Receives Major Funding
A key component of ON Semiconductor’s growth strategy involves significant expansion in silicon carbide (SiC) manufacturing capabilities. The European Commission has approved €450 million in state aid for the construction of a fully integrated SiC production facility in the Czech Republic. This factory represents part of a total investment of €1.64 billion and is projected to become operational by 2027.
Upon completion, the facility will mark a significant milestone as the European Union’s first completely integrated silicon carbide production site, handling the entire manufacturing process from crystal growth through finished semiconductor production.
Should investors sell immediately? Or is it worth buying ON Semiconductor?
Quarterly Performance Reflects Transition Period
The company’s most recent financial results present a mixed picture as it navigates current market conditions. Third-quarter 2025 revenue declined by 12% year-over-year to $1.55 billion, while earnings per share came in at $0.63.
Looking ahead, management provided fourth-quarter guidance with EPS projected between $0.57 and $0.67, potentially indicating early signs of market stabilization. These financial results are being impacted by strategic restructuring efforts, including impairment and accelerated depreciation charges totaling $200 to $300 million that are temporarily affecting the company’s balance sheet.
Strategic Overview
- Manufacturing Investment: €1.64 billion total project with €450 million in EU funding
- Production Timeline: New SiC facility expected operational by 2027
- Capital Return: New $6 billion share repurchase program beginning January 2026
- Q3 Revenue: $1.55 billion (representing a 12% year-over-year decrease)
- Q3 EPS: $0.63 per share
- Special Charges: $200-300 million in impairment and accelerated depreciation expenses
The critical question for investors remains whether ON Semiconductor’s substantial financial commitments will successfully overcome current operational challenges and position the company to capitalize fully on the expanding silicon carbide market opportunities.
Ad
ON Semiconductor Stock: Buy or Sell?! New ON Semiconductor Analysis from November 24 delivers the answer:
The latest ON Semiconductor figures speak for themselves: Urgent action needed for ON Semiconductor investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from November 24.
ON Semiconductor: Buy or sell? Read more here...
