ON SEMICONDUCTOR CORPORATION

Red flags

• Revenue fell $1.087 billion, or 15.3%, while operating income collapsed from $1.768 billion to $84.2 million.
• Gross margin declined to 33.1% from 45.4%; PSG margin fell to 24.5% and ISG margin to 15.1%.
• The company recorded $666.9 million of restructuring, asset impairment and other charges, versus $133.9 million in 2024, plus $268.2 million of excess and obsolete inventory charges.
• Net long-term debt was $2.981 billion against 2025 net income of only $123.6 million, with $804.9 million due in 2027, $700.0 million in 2028 and $1.5 billion in 2029.
• Non-cancelable purchase obligations total $605.7 million, including $354.3 million due in 2026, creating fixed commitments while demand and capacity utilization remain weak.
• A single distributor accounted for approximately 11% of 2025 revenue, creating customer concentration risk.
• Manufacturing disruptions could have an outsized impact because the network includes interdependent facilities and some single-source facilities; replacement suppliers may be limited or costly.