Tech & AI
Onsemi Says AI Data-Centre Revenue Up 175% as Power Demand Lifts Chipmaker
The power-chip maker reported third-quarter revenue of $1.72 billion and guided the fourth quarter to a similar range.
HedgeWeekly Tech & AI Desk ·
Onsemi, which makes power semiconductors (chips that manage and convert electricity), reported third-quarter revenue of $1,722.3 million on Monday, up 11% from a year earlier and 7% from the prior quarter. Non-GAAP earnings per share were $0.90, against $0.63 a year ago. The quarter ended October 2.
Chief executive Hassane El-Khoury said rising power requirements are driving faster demand in the company's AI data-centre and industrial markets. Onsemi said its AI data-centre revenue grew 39% sequentially and 175% year on year, though it did not give a dollar figure for that business.
Non-GAAP gross margin was 41.2%, up 190 basis points on the quarter and the fifth straight quarterly rise. Free cash flow was $488.6 million, up 31% year on year. Share repurchases fell to $19.9 million from $325.0 million a year earlier. Onsemi also agreed to buy Ferric, which it said lifts its 2030 AI data-centre revenue target by $500 million to more than $3 billion. For the fourth quarter it guided revenue of $1,715 million to $1,815 million and non-GAAP EPS of $0.95 to $1.07.
Why it matters: AI servers draw far more power than conventional ones, and the chips that deliver it are a less crowded corner of the AI build-out than processors. Onsemi's undisclosed base for AI revenue makes the 175% hard to size, and a fourth-quarter revenue guide that starts below this quarter's level leaves the midpoint only modestly higher. Watch the Ferric deal terms, the sharp cut in buybacks, and whether data-centre growth offsets weaker areas of the business.