On Semiconductor's Q3 Beats, But Q4 Guidance Slumps on Slowing Auto and Industrial Markets
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On Semiconductor reported Q3 earnings that beat expectations, but gave weak Q4 guidance below estimates due to slowing auto and industrial markets.
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On gets over half its revenue from auto chips and has benefited from EV growth, but the EV market now appears to be cooling significantly.
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On's CEO noted EVs use 14x more chips than internal combustion engines, so a slowdown in EVs disproportionately affects auto chipmakers.
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Q4 revenue and EPS guidance missed estimates, with management citing slowdowns from large auto customers in Europe and broad industrial weakness.
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Investors are debating whether the auto and industrial slowdown is cyclical or a peaking market, with On a leader in silicon carbide chips crucial for future EVs.