Chipmaker Onsemi reports $1.6b Q3 revenue, eyes AI growth

Onsemi reported revenue of US$1.6 billion for Q3 2025, with a GAAP gross margin of 37.9% and a GAAP operating margin of 17%.

The Arizona-based semiconductor company also posted non-GAAP gross and operating margins of 38% and 19.2%, respectively.

Diluted earnings per share were US$0.63 on both a GAAP and non-GAAP basis.

Operating cash flow for the quarter reached US$418.7 million, while free cash flow totaled US$372.4 million, up 22% year-on-year.

Onsemi said it repurchased US$900 million in shares so far in 2025, about equal to its free cash flow for the year.

The company noted stabilization in core markets and ongoing growth in demand for AI applications.

🔗 Source: Onsemi

🧠 Food for thought

Implications, context, and why it matters.

Onsemi’s Q3 non-GAAP EPS of $0.63 beat by 6.6%, while revenue topped forecasts by 2.2% 1. The non-GAAP operating margin fell to 19.2% from 33.8% a year ago, while gross margin dropped to 38% from 54.5% 2.
Inventory days outstanding stayed high at 193 days (33 days above five-year average 1) and demand normalization remains incomplete. (Inventory days outstanding is the average number of days inventory sits before being sold.)
Q4 guidance projects revenue of $1.53 billion at midpoint 1, essentially flat, which implies a plateau rather than a recovery. Management’s mention of AI demand growth 3 has not yet lifted margins or revenue.
Infineon’s 12 kW PSU reference design reaches 113 W/in³ power density 4 and Nvidia is moving to 800-volt direct current (DC) 5. That shift opens opportunities for PSU makers to build units using silicon carbide (SiC) with gallium nitride (GaN) 6.
PSU revenue could hit $14B by 2030, with over 3 kW growing 25%+ CAGR 6. System integrators plus thermal firms can pursue hyperscalers (cloud and internet companies with massive data centers) as AI racks climb above 120 kW while rack power heads toward 500 kW to 1 MW this decade 5.
Component makers that offer hot-swap controllers (chips that let technicians safely insert or remove hardware under power) plus protection circuitry for 800-volt DC systems 5 can work with server original equipment manufacturers (OEMs) to meet service needs on live 800-volt buses, which 54-volt setups do not handle.