onsemi reports quarterly revenue of USD 1.722 billion as AI data center revenue rises 175%

Third-quarter financial results

onsemi continued to grow in the third quarter of 2026, supported by expanding demand for AI data center power. Revenue increased 11% year on year, while AI data center revenue surged 175%, and earnings per share grew substantially faster than revenue.

onsemi announced on November 3 that it recorded third-quarter 2026 revenue of $1.722 billion.

Gross margin was 41.4% on a generally accepted accounting principles (GAAP) basis and 41.2% on a non-GAAP basis. Operating margin was 22.0% on a GAAP basis and 23.2% on a non-GAAP basis.

Diluted earnings per share (EPS) were $0.79 on a GAAP basis and $0.90 on a non-GAAP basis. Earnings per share grew more than 40%, compared with revenue growth of 11% year on year, reflecting improved profitability.

Cash generation also strengthened. Operating cash flow increased 23% year on year to $516 million, while free cash flow (FCF) rose 31% to $489 million. Free cash flow represented approximately 28% of revenue.

Hassane El-Khoury, chairman and CEO of onsemi, said, "As power requirements increase, demand is accelerating in AI data centers and industrial markets, and customers are adopting our differentiated products and expanding volume production."

El-Khoury added, "Third-quarter revenue, gross margin and earnings per share all exceeded the midpoint of guidance, and AI data center revenue grew 39% sequentially and 175% year on year."

Gross margin increased 190 basis points (1.9 percentage points) sequentially, improving for the fifth consecutive quarter. Thad Trent, executive vice president and CFO of onsemi, emphasized that earnings per share were growing faster than revenue and said the business continued to benefit from operating leverage.

onsemi is pursuing its Fab Right strategy while expanding volume production of differentiated new products to improve profitability and margins. Through these efforts, it plans to strengthen its business foundation for sustainable, profitable growth.

Acquisitions and technology partnerships

onsemi highlighted expansion in AI data center power delivery among its key third-quarter business achievements. It announced an agreement to acquire Ferric, a company developing power delivery technology for next-generation AI processors. Through this acquisition, onsemi strengthened its position in AI processor power delivery and raised its 2030 AI data center revenue target by $500 million to more than $3 billion.

It also changed the terms of its acquisition of Synaptics. The transaction was converted from an approximately $7 billion stock deal to an approximately $5.7 billion cash deal. onsemi expects the acquisition to be accretive to non-GAAP earnings per share immediately after completion.

The company also expanded cooperation in automotive and power semiconductors. It announced a strategic technology collaboration with Subaru for early access to its Embedded Power Platform (EPP), a new power architecture integrating heterogeneous technologies.

In renewable energy and power infrastructure, Sungrow adopted onsemi's latest EliteSiC hybrid power module technology. The collaboration aims to address rising power demand driven by the expansion of AI data centers, renewable energy and electrification.

Power and sensing technology strategy

onsemi is strengthening its competitiveness in power and sensing technologies in response to a market environment in which demand for power semiconductors is expanding, particularly in AI data centers. Its strategy is to expand business opportunities in related markets through power delivery technology for AI infrastructure and silicon carbide-based power solutions.

onsemi held a conference call for the financial community at 5 p.m. US Eastern Time on November 2 to discuss its third-quarter 2026 results and business developments.

Original Korean article: epnc.co.kr

English brief by Korea Wind Intelligence, koreawindintel.com