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Onsemi faces fab underutilization charges but forecasts AI data center growth for 2025
Monday, February 9, 2026 at 10:38 PM
ON Semi reported fourth-quarter 2024 revenue of $1.53 billion, a 11% year-over-year decrease, impacted by 700 basis points of headwinds from underutilization charges at its fabs. The company expects over $250 million in AI data center revenue for 2025, with high-teens growth projected for the first quarter. While automotive revenue stabilized with a 1% quarterly increase as inventory digestion concluded, industrial revenue grew 6% year-over-year, ending an eight-quarter decline.
Context
onsemi reported fourth-quarter revenue of $1.53 billion, a 11% year-over-year decline, yet its outlook suggests a critical turning point for the chipmaker. Profitability was temporarily squeezed by 700 basis points of headwinds from factory underutilization charges, resulting in a gross margin of 38.2%. Despite these costs, the company’s guidance for the upcoming quarter implies its first year-over-year growth in over three years, indicating that the cyclical downturn for the power semiconductor manufacturer is likely bottoming out.
Growth in 2025 is expected to be fueled by the AI data center market, where onsemi forecasts revenue exceeding $250 million. This specific segment is projected to grow by high-teens percentages in the first quarter alone. Supporting this recovery, industrial revenue rose 6%, ending an eight-quarter decline, while automotive revenue stabilized with 1% sequential growth. With automotive inventory digestion now complete, onsemi is strategically positioned to capture expanding demand for high-efficiency power solutions across AI and industrial infrastructure.
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