Onsemi shares hit record as they overtake electric car chips
Nov. 1 (Reuters) – Chipmaker Onsemi (ON.O) released better-than-expected sales and profit forecasts on Monday after focusing on its top-grossing products, sending shares to an all-time high.
The results come as chief executive Hassane El-Khoury, who took over the management late last year, reset the company’s strategy in areas such as power electronics for vehicles. electrics and sensors for driver assistance technologies.
Onsemi makes some of its chips from silicon carbide, a new and exotic material essential to helping electric vehicles achieve greater range. The company said on Monday that it had reached its $ 415 million deal to buy GT Advanced Technologies (GTAT) (GTAT.PK), a supplier of the raw material for chips.
The move will help reduce Onsemi’s raw material needs from Wolfspeed (WOLF.N), which supplies silicon carbide to several chipmakers but also sells its own chips directly to automakers.
“I don’t want to be in this standoff,” El-Khoury told Reuters in an interview. “By the end of 22, the majority of our silicon carbide revenue will be on GTAT.”
Onsemi, which manufactures around 70% of its own chips, is working to build inline factories with greater capacity. But El-Khoury believes the company won’t be able to meet demand from automakers until at least 2023.
“We’re not going to be 100% of what customers want in 22. We’re always going to be limited by supply,” he said.
Onsemi shares closed up 14.3% at $ 54.99 after the company forecast fourth quarter revenue and adjusted earnings with midpoints of $ 1.79 billion and 95 cents per share , beating analysts’ expectations of $ 1.72 billion and 77 cents per share, according to IBES data from Refinitiv.
For the third quarter ended Oct. 1, Onsemi reported sales of $ 1.74 billion and adjusted earnings of 84 cents per share, above estimates of $ 1.71 billion and 74 cents per share, according to data from Refinitiv.
Reporting by Stephen Nellis in San Francisco; edited by Richard Pullin
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