onsemi (ON) outlined plans to push gross margins above 50% by 2030 during a presentation at the Deutsche Bank 2026 Technology Conference, citing improving demand across key end markets and operational efficiencies. The company, which reported a 42.78% gross margin in the most recent 12-month period, expects margin expansion to be driven by higher fab utilization, manufacturing improvements and product mix shifts.
The Phoenix-based chipmaker reported utilization rose to 83% in its latest quarter from 68% at the end of 2025, a 1,500-basis-point increase over six months. Each 1% gain in utilization is estimated to add 25 to 30 basis points to gross margin, according to management. The company targets peak utilization of 92% to 93%, levels last seen during prior industry peaks.
onsemi’s margin bridge projects 650 basis points from higher utilization, 200 basis points from its Fab Right manufacturing initiative, 200 basis points from product mix improvements and 200 basis points from inventory burn-down. The company’s Treo platform, a 65-nanometer mixed-signal analog BCD platform with up to 90-volt capability, is expected to contribute significantly, with gross margins of 60% to 70% and a $1 billion revenue target by 2030.
Demand recovery is evident across multiple segments. The company’s energy infrastructure business is forecast to grow 40% year-over-year in 2026, following a 25% sequential increase in the most recent quarter. onsemi also upgraded its AI data center revenue outlook for 2026 to more than double after stronger-than-expected first-half results. Automotive sales are projected to rise about 6% globally, with onsemi targeting high single-digit growth above the seasonally adjusted annual rate.
Inventory levels have normalized, with channel inventory at 10 to 11 weeks and total inventory days declining by 8 days to 67 in the latest quarter. Bridge inventory, which peaked in mid-2025, is expected to take over two years to fully unwind. The company completed $900 million in annualized divestitures and maintains mid-single-digit capital expenditure intensity in maintenance mode.
Management highlighted risks of a potential supply chain snapback, noting that lead times could extend rapidly if demand rebounds sharply. The transition to 800-volt power delivery systems is slated to begin in late 2027 or early 2028, while the planned acquisition of Synaptics is expected to close in mid-2027. onsemi also anticipates an inflection in humanoid robotics volumes within one to two years.
The company’s stock was trading at $74.18, with Wall Street analysts setting price targets ranging from $85 to $150. onsemi’s market capitalization stands at $29 billion, with a trailing price-to-earnings ratio of 47.4.
