onsemi (ON) executives outlined plans to expand gross margins beyond 50% by 2030 during the Deutsche Bank 2026 Technology Conference in Dana Point on August 27, 2026. Chief Executive Officer Hassane El-Khoury and Chief Financial Officer Thad Trent highlighted operational improvements, including a utilization rate that rose to 83% in the most recent quarter from 68% at the end of 2025, as demand for AI and automotive semiconductors strengthened.
Gross margins currently sit in the 40s, with a 42.78% gross profit margin recorded over the past 12 months. Management reiterated a target of exceeding 50% gross margin by 2030, supported by a margin bridge totaling 1,250 basis points. Of this, 650 basis points are expected to come from higher utilization, 200 basis points from manufacturing optimization, 200 basis points from product mix, and 200 basis points from inventory reduction. Treo-based products, which carry gross margins of 60% to 70%, are central to the plan, with a $1 billion annual revenue target by 2030.
The company’s market capitalization stands at $29 billion, with shares trading near $74.18. Wall Street price targets range from $85 to $150, while the trailing 12-month P/E ratio is 47.4. Free cash flow margin reached 24% during the recent downturn, with capital expenditure intensity remaining in the mid-single-digit percentage range and operating expenses expected to grow in the low single digits for several years.
Demand for AI data center chips has exceeded expectations, with revenue now projected to more than double in 2026 following stronger-than-anticipated first-half performance. Automotive revenue, which grew 72% from late 2019 to early 2026 at a 9.5% compound annual growth rate, is believed to have bottomed in the first quarter of 2026. Global auto sales are forecast to rise approximately 6% year-over-year in 2026. The energy infrastructure segment is expected to grow 40% in 2026, following a 25% sequential increase.
onsemi’s utilization recovery has been rapid, with El-Khoury noting that a demand rebound could quickly revert conditions to pre-2025 levels. The company has implemented two pricing increases in 2026 and maintains about 35% of production through external partners. Inventory levels have declined by eight days to 67 days in the latest quarter, with visibility extending into 2027 and 2028.
The firm’s technology roadmap includes the Treo 65-nanometer mixed-signal analog BCD platform, a proprietary vertical gallium nitride fab in Syracuse, New York, and a 300-millimeter fabrication facility in East Fishkill. The planned acquisition of Synaptics, expected to close in mid-2027, will add AI-first compute and tactile sensing capabilities. onsemi will host an Analyst Day on September 16, 2026.
