Onsemi’s revenue miss fuels concerns over chip glut

Onsemi’s revenue miss fuels concerns over chip glut is profiled by BTW Media because public-source evidence links it to internet infrastructure, governance, operational dependencies, or market visibility.

• Onsemi reported US $1.53 billion in Q4 revenue, below analysts’ estimates and down year‑on‑year.
• Sluggish segments, inventory buildup and weaker EV demand highlight broader challenges for chipmakers.

What happened

Chip designer and manufacturer Onsemi (ON.O) disclosed its fourth‑quarter 2025 financial results, posting revenue of US $1.53 billion, an 11% decline year‑on‑year and slightly below the US $1.54 billion analysts had forecasted. The shortfall sent the company’s shares down nearly 6% in after‑hours trading. 

All major business units contributed to the downturn: the Power Solutions Group saw revenue slip 11% to US $724.2 million, the Intelligent Sensing Group dropped 17% to US $249.6 million, and the Analog and Mixed‑Signal segment fell 9% to US $556.3 million. 

Despite the revenue shortfall, Onsemi reported adjusted earnings of 64 cents per share, slightly above the consensus estimate of 62 cents. For the first quarter of 2026, the company forecast revenue between US $1.44 billion and US $1.54 billion, with the midpoint below analysts’ expectations.

Onsemi cited a persistent inventory glut, as customers continue to work through stockpiles ordered during earlier supply chain bottlenecks. Analysts also flagged slower‑than‑expected growth in electric vehicle sales and intensifying competition, particularly in the silicon carbide chip market, as factors weighing on demand.

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Why it’s important

Onsemi’s results reflect broader structural challenges in the semiconductor industry, where cyclical demand swings and excess inventory have pressured revenue and profitability across multiple providers. The inventory overhang suggests that OEMs and systems builders are cautious about restocking, which could delay new orders and slow revenue recovery.

The company’s business exposure to electric vehicles (EVs) — a major growth vector for silicon carbide and advanced power semiconductors — also highlights risk: EV adoption has been slower than some forecasts, and recent reductions to US clean energy tax credits may further reduce near‑term demand.

Moreover, rising competition from Chinese semiconductor firms, especially in silicon carbide and advanced materials, underscores the geopolitical and market pressures facing US chipmakers. For investors, Onsemi’s guidance that Q1 revenue could again fall short of estimates underscores uncertainty in demand patterns, even as earnings beat modestly.

The industry’s ability to balance inventory, adapt to fluctuating EV demand and compete globally will be critical in shaping how quickly chipmakers like Onsemi can return to growth.