ON Semiconductor Corporation (ON): Marketing Mix Analysis [Dec-2025 Updated]

You're looking at a semiconductor firm navigating a choppy 2025, where tariffs and inventory corrections have squeezed margins-honestly, it's a tough spot for any Integrated Device Manufacturer. The key to understanding ON Semiconductor Corporation right now isn't just the reported Q2 2025 revenue of $1.47 billion; it's the aggressive, almost surgical pivot to high-margin, future-proof tech. They are actively pruning legacy revenue-shedding about 5% of their 2025 top line-to double down on Silicon Carbide for electric vehicles and intelligent sensing, while their global manufacturing and distribution footprint is being reshaped to manage new trade realities. It's a high-stakes game of portfolio refinement and market capture; you need to see exactly how their Product, Place, Promotion, and Price strategies are set up to win in this new, more focused era.

ON Semiconductor Corporation (ON) - Marketing Mix: Product

The product strategy for ON Semiconductor Corporation centers on a focused portfolio of high-growth, high-margin intelligent power and sensing solutions, moving away from lower-value offerings.

Silicon Carbide (SiC) Power Devices for Electric Vehicles (EVs)

ON Semiconductor Corporation is aggressively positioning its Silicon Carbide (SiC) technology, particularly the EliteSiC MOSFETs and modules, as pivotal for vehicle electrification. Automotive revenue for the third quarter of 2025 reached $787 million, marking a 7% sequential increase. The company is deepening its EV partnerships, including an expanded collaboration with Schaeffler for a new EliteSiC-based PHEV platform. Furthermore, new design-ins for SiC were secured with NIO and various Chinese Tier 1 automotive suppliers. ON Semiconductor Corporation has stated an ambition to capture 35-40% of the Silicon Carbide market.

Intelligent Power Solutions for Energy Infrastructure and Industrial Automation

The Power Solutions Group (PSG) generated revenue of $737.6 million in the third quarter of 2025, showing a 6% sequential rise. Beyond EVs, ON Semiconductor Corporation's SiC devices are targeted for growth in energy infrastructure, including charging stations, utility-scale solar central inverters, and energy storage systems. The company is also advancing its vertical gallium nitride (vGaN) technology, which enables up to 50% lower energy loss, targeting applications in AI data centers and electrification.

Intelligent Sensing Products, Including CMOS Image Sensors for Automotive ADAS

The Intelligent Sensing Group (ISG) posted revenue of $230 million in the third quarter of 2025, a 7% sequential increase, despite an 18% year-over-year decline as part of a strategic refocus. A key product development in this area is the launch of its Hyperlux image sensor family, designed to provide crucial elements for Advanced Driver Assistance Systems (ADAS) and autonomous driving solutions. The company also noted significant project activity in automation and inspection within its industrial image sensor design funnel.

Divesting Non-Core, Lower-Margin Legacy Businesses

Portfolio streamlining is a clear action point, involving the exit of non-core businesses to improve overall margin profile. In the third quarter of 2025, the company realized a $45 million revenue exit from these non-core businesses. Management guided for a total non-core revenue headwind of $200 million for the full fiscal year 2025, with an expected further exit of $55 million in the fourth quarter of 2025. This aligns with earlier indications that the company expected to shed about 5% of its 2025 revenue through this strategic shift.

High-Performance, Analog, and Mixed-Signal Integrated Circuits

The Analog and Mixed-Signal Group (AMG) recorded revenue of $583 million in the third quarter of 2025, up 5% sequentially, though down 11% year-over-year. This segment is being bolstered by strategic integration, such as the acquisition of Vcore Power Technology, with sampling expected to start in the fourth quarter of 2025 and production targeted for early 2026. The Treo Platform, described as the industry's most advanced analog and mixed-signal platform, has a design funnel exceeding $1 billion as of the third quarter of 2025, serving automotive, industrial, and AI sectors.

The breakdown of ON Semiconductor Corporation's product group revenue for the third quarter of 2025 is detailed below:

The company's overall non-GAAP gross margin for the third quarter of 2025 was 38.0%.

ON Semiconductor Corporation (ON) - Marketing Mix: Place

The Place strategy for ON Semiconductor Corporation centers on an optimized, vertically integrated supply chain designed to serve high-volume, strategic end-markets like automotive and industrial power. This approach balances direct engagement for key accounts with broad market reach via established channel partners.

Direct sales model for strategic, high-volume automotive and industrial customers is the primary route for securing large, multi-year design wins. This model allows ON Semiconductor Corporation to embed its intelligent power and sensing technologies directly with Original Equipment Manufacturers (OEMs) in critical applications, such as electric vehicle (EV) traction inverters and industrial energy infrastructure. This focus supports the company's aggressive vertical integration strategy in Silicon Carbide (SiC).

The global distribution network through major channel partners like Arrow and Avnet, among others, handles the broader market access, particularly for the tens of thousands of smaller customers and the mass market consumer base. Authorized distributors are explicitly used to ensure the delivery of genuine products with full warranty coverage, mitigating risks associated with counterfeit components.

Manufacturing footprint optimization, shifting to 300mm SiC production, is a core element of the 2025 distribution strategy, aiming for increased efficiency and capacity. ON Semiconductor Corporation is executing a plan that includes consolidating facilities and investing in larger wafer sizes. The company qualified 200mm (8in) SiC wafers in late 2024, with full production commencing in 2025. Furthermore, the East Fishkill, New York, 300mm wafer fabrication facility, acquired from GlobalFoundries, supports the manufacture of higher-margin strategic growth products on larger wafers.

The physical infrastructure supporting this distribution is extensive, comprising a global network of operational sites:

• Total manufacturing sites: 19.
• Total design centers: 43.
• Total solution engineering centers (SECs): 8.

The company maintains key design centers and sales offices across North America, Europe, and Asia to provide localized support for design-ins and customer service. The European presence is significant, supporting the automotive sector's expansion.

ON Semiconductor Corporation maintains a strong presence in key automotive manufacturing hubs, like Germany and China, which are crucial for securing high-volume EV business. For instance, the company has a supply agreement with Volkswagen Group for its next-generation traction inverter, which utilizes SiC modules scaling across power levels.

The scale of the SiC manufacturing footprint is detailed by specific site capabilities:

Geographic distribution of technical and sales support is structured to cover major industrial and automotive regions:

• North America locations include Headquarters and a Design Center in Scottsdale, USA, and manufacturing in Nampa, USA.
• European locations include Design Centers in Brno, Czech Republic, and manufacturing in Rožnov, Czech Republic, with presence in Germany, Ireland, Romania, Sweden, Slovakia, and others.
• Asia Pacific includes manufacturing sites in Leshan and Shenzhen, China, as well as operations in Japan, Malaysia, Philippines, South Korea, and Taiwan.
• Solution Engineering Centers are specifically located in the United States, Germany, South Korea, China, Taiwan, Japan, Slovakia, and Sweden.

ON Semiconductor Corporation (ON) - Marketing Mix: Promotion

Promotion for ON Semiconductor Corporation centers on technical authority and strategic market positioning, aiming to educate design engineers and secure long-term design wins in high-growth segments.

Heavy emphasis on technical white papers and application-specific content.

The promotional backbone involves deep technical enablement, a necessity in the B2B semiconductor space where engineers are the primary influencers. While specific ON Semiconductor white paper titles from late 2025 aren't explicitly listed, the industry trend confirms this focus; for instance, a general 2025 White Paper Collection covered innovations at the core of automotive, sustainability, and AI-driven ecosystems, indicating the type of content ON Semiconductor must produce to maintain thought leadership. The goal is to establish credibility by providing technical resources like datasheets and reference designs to help customers integrate complex solutions efficiently.

Strategic partnerships with Tier 1 automotive suppliers and OEMs (e.g., BMW).

Communication heavily features the success of deep-seated collaborations. ON Semiconductor has highlighted strategic partnerships with automotive giants like the Volkswagen Group and technology leaders such as Nvidia for AI data center power solutions. This messaging is directly tied to quantifiable growth: SiC revenue in China doubled in Q2 2025, and the company secured design wins in 50% of new Electric Vehicle (EV) models showcased at the Shanghai Auto Show, with expected ramps in the second half of 2025. Furthermore, the AI data center business, part of the 'Other' segment, grew 16% quarter-over-quarter in Q2 2025.

Participation in industry-specific trade shows (e.g., electronica, CES, APEC).

Physical presence at key industry events is crucial for demonstrating technology. ON Semiconductor actively showcases its Intelligent Power solutions at these venues. Here's a snapshot of a confirmed 2025 event:

The company's experts participate in technical sessions, such as the APEC 2025 session titled 'SiC vs GaN: Which will lead in Power Conversions?'

Investor relations focus on the high-margin, secular growth story (SiC/EV).

Investor communications consistently frame near-term cyclical volatility against a backdrop of long-term structural growth, primarily via Silicon Carbide (SiC) and AI. The narrative is quantified with financial targets: ON Semiconductor aims for gross margin expansion to 53% by 2027, up from a reported non-GAAP gross margin of 38.0% in Q3 2025. The Q3 2025 revenue was $1.55 billion, with the Automotive segment contributing $733 million. The company's commitment to shareholder returns is promoted by the pledge to return 100% of free cash flow to shareholders in 2025, with year-to-date share repurchases reaching approximately $925 million.

Digital marketing targeting design engineers and procurement defintely professionals.

Digital outreach supports the technical content strategy and talent acquisition, which is intrinsically linked to marketing the company's innovative culture. The sheer volume of technical hiring suggests a focus on this audience; as of late 2025, ON Semiconductor had 72 open Engineering positions and 8 open Engineering, Design positions, alongside 7 open Marketing roles. Following the company on professional platforms like LinkedIn is a key digital touchpoint promoted to potential employees and industry followers.

Finance: draft 13-week cash view by Friday.

ON Semiconductor Corporation (ON) - Marketing Mix: Price

The pricing strategy for ON Semiconductor Corporation (ON) reflects a dual approach: capturing premium value for differentiated, next-generation technologies while maintaining competitive positioning in more mature product segments. This strategy is heavily influenced by the company's vertical integration, particularly in Silicon Carbide (SiC), which provides supply control and cost advantages.

Premium pricing strategy for differentiated SiC and intelligent power products.

ON Semiconductor Corporation is clearly positioning its advanced SiC and intelligent power solutions to command a premium. This is evidenced by the strategic focus on high-value areas like AI data centers, where AI revenue is expected to reach approximately $250 million in 2025. The company's non-GAAP gross margin has remained relatively resilient despite a cyclical downturn, achieving 38.0% in Q3 2025, up from 37.6% in Q2 2025. This margin strength, even with lower utilization (which was around 60% in Q2 2025, with a target to reach the low 80% range upon recovery), suggests that the mix shift toward higher-value products like SiC is supporting pricing power. The long-term ambition is to drive non-GAAP gross margin to 53% by 2027, indicating a significant premium expectation for its future product mix.

Long-term supply agreements (LTSAs) with key customers to secure revenue visibility.

Securing long-term commitments is a core pricing tactic to ensure revenue visibility and justify capacity investments. ON Semiconductor Corporation has been deepening these relationships, reinforcing Long-Term Supply Agreements (LTAs) with top global automakers in the second half of 2025. While specific 2025 contract values are not public, a prior commitment from leading solar inverter manufacturers represented roughly $1.95 billion in purchase commitments. Furthermore, as of December 31, 2023, the remaining performance obligations under all LTSAs were approximately $16.5 billion, with about 29% of that amount expected to be recognized as revenue in the following twelve months.

Value-based pricing tied to performance gains in efficiency and system cost reduction.

The pricing justification for SiC is explicitly tied to the total system value delivered to the customer. The adoption of ON Semiconductor Corporation's SiC is expected to lead to improved system costs and performance in electric vehicles (EVs), enabling smaller batteries, increased range, and lighter power conversion systems. The CEO noted a focus on delivering system-level value that enables customers to achieve more with less power. This value proposition supports a pricing structure above commodity silicon, as the benefit is measured in the end-system efficiency, not just the component cost.

Competitive pricing in mature product lines to maintain market share.

To maintain overall market presence, pricing in mature lines must be competitive. The company is actively pruning lower-margin products, with about 5% of 2025 revenue, roughly $300 million, not expected to carry over into 2026 due to exiting non-core businesses. This action is a direct response to sales that depend too much on price competition. The Q1 2025 results showed margins squeezed by pricing pressures alongside lower utilization.

Pricing power supported by supply constraints in advanced SiC technology.

ON Semiconductor Corporation's vertical integration in SiC is a key enabler of pricing power, as it allows better control over the supply chain. While the company experienced margin compression in Q1 2025, management highlighted that the non-GAAP gross margin of 40.0% was favorable compared to the approximately 30% margins seen in previous downturns. This suggests that the strategic, high-growth products maintain pricing integrity even when overall utilization is low. The company aims to capture 35-40% of the Silicon Carbide market, leveraging its controlled supply to command better terms.

Here's a quick look at the margin and revenue context for the pricing strategy:

The pricing environment is characterized by these key dynamics:

• The company is actively shedding lower-margin business dependent on price competition.
• SiC adoption is accelerating, with new generation MOSFETs launched in Q3 2025 targeting 750V-1200V EV applications.
• The company is committed to returning approximately 100% of free cash flow to shareholders through repurchases in 2025.
• The stock trades at an estimated 2025 Price-to-Earnings multiple of 21 times, which is considered attractive given the expected earnings rebound.