On Semi hit by Covid-19 downturn
On Semiconductor is one of the top ten global semiconductor suppliers to the automotive industry and saw full year revenue of $5.255bn for 2020, down 5 percent from $5,517bn in 2019. Profits were also lower at $348m in 2020 compared to $432m.
The company saw a recovery towards the end of the year with Q4 revenue at $1.446bn, up three percent year-over-year and ten percent over the previous quarter, with a record automotive revenue of $491m.
“In the fourth quarter, we saw strong improvement in business trends driven by broad-based improvement in global macroeconomic environment, lean inventories, and a steep recovery in the automotive end-market, in which we continue to see our content growth exceed the overall automotive market growth,” said Hassane El-Khoury, president and CEO of ON Semiconductor who took over from Keith Jackson late last year.
The outlook is strong, says El-Khoury, including the ramping of supply of lidar laser imaging technology to a tier one automotive supplier in Europe.
“As I dove deeper into the company during the last eight weeks I have been positively surprised, and have grown increasingly bullish about our prospects,” he said. “The opportunities in front of us far exceed my initial expectations, and I am working with my team to turn these opportunities into a strategy with a credible execution plan. I’m very confident that we will be able to deliver the full potential of the company to our stakeholders. Based on current demand trends and the global macroeconomic outlook, we expect to continue to see above seasonal demand trends in the near term. As we reposition the company, we aim to realign capital allocation and investments in the business with our strategic intent of driving strong revenue growth, structural margin expansion, and free cash flow generation.”
Based on product booking trends, backlog levels, and estimated turns levels, the company says it expects first quarter of 2021 revenue will be approximately $1.410 to $1.510bn.
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