• In late June 2026, ON Semiconductor announced agreements to divest manufacturing facilities in Tarlac, Philippines and Mountain Top, Pennsylvania to Greatek Electronics and Silex Microsystems, respectively, as part of its Fab Right cost-optimisation program.
• The transactions, which include a long-term supply agreement and a multi-year transition window, highlight ON Semiconductor’s effort to sharpen its manufacturing footprint around higher-efficiency, higher-margin operations.
• Next, we’ll examine how shedding these fabs under the Fab Right program may reshape ON Semiconductor’s investment narrative and risk profile.

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ON Semiconductor Investment Narrative Recap

To own ON Semiconductor, you need to believe its push into higher value power and sensing chips, especially for EVs and AI data centers, can offset cyclicality and competition in autos and industrials. The fab divestitures fit the Fab Right story of lifting efficiency and margins, but they do not remove the near term risks around auto demand softness, capacity underutilization and the revenue drag from exiting lower margin legacy products.

Among recent developments, ON Semiconductor’s addition to several Russell growth benchmarks in late June 2026 stands out, as it could increase visibility and index driven demand just as the Fab Right program reshapes the manufacturing base. Together, higher profile index inclusion and a leaner fab footprint sit alongside design wins in EVs and AI power as key potential offsets to cyclical and competitive pressures that still hang over the story.

Yet while Fab Right sounds reassuring, investors should be aware that persistent underutilization and auto demand uncertainty could still...

ON Semiconductor's narrative projects $8.1 billion revenue and $2.2 billion earnings by 2029. This requires 10.3% yearly revenue growth and about a $1.6 billion earnings increase from $573.7 million today.

Uncover how ON Semiconductor's forecasts yield a $103.97 fair value, a 14% upside to its current price.

Exploring Other Perspectives

Some of the lowest analysts were already cautious, assuming revenues of about US$8.0 billion and earnings of roughly US$2.2 billion by 2029, and they focus heavily on risks like rising geopolitical and regulatory costs possibly squeezing margins further. This new Fab Right news could either ease those worries or reinforce them, so it is worth comparing these more pessimistic views with the more optimistic ones before you decide what feels reasonable.

Explore 5 other fair value estimates on ON Semiconductor - why the stock might be worth as much as 60% more than the current price!

Decide For Yourself

Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.

• A great starting point for your ON Semiconductor research is our analysis highlighting 1 key reward and 3 important warning signs that could impact your investment decision.
• Our free ON Semiconductor research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate ON Semiconductor's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.