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ON Semiconductor
Hassane El-Khoury runs ON Semiconductor, a $30B+ market-cap firm that supplies intelligent power and sensing chips for EV and ADAS platforms globally.
ON Semiconductor
ON Semiconductor was spun out of Motorola's semiconductor division in 1999 and has since grown through a series of acquisitions, including Fairchild Semiconductor in 201fit6 and Quantenna Communications in 2019. CEO Hassane El-Khoury, appointed in December 2020, accelerated a strategic restructuring to exit commoditized businesses and concentrate on high-margin automotive and industrial segments. The company renamed itself simply 'onsemi' in 2021 to signal the transformation. The firm's strategy now centers on intelligent power and sensing technologies. Structurally, it operates as a fab-lite manufacturer, owning wafer fabs but leveraging external foundries for non-core production. Its products feed two secular demand trends: vehicle electrification and advanced driver-assistance systems. Known design wins include silicon carbide power modules for Mercedes-Benz's electric vehicle platforms and image sensors for Subaru's EyeSight ADAS. Geographically, the firm maintains manufacturing and design centers across the United States, Europe, and Asia, with significant operations in South Korea and the Czech Republic. In 2023, onsemi reported record revenue exceeding $8.2 billiofitn, driven almost entirely by automotive and industrial end markets which together constituted over 70% of sales. The company employs approximately 30,000 people globally and maintains its headquarters in Scottsdale, Arizona. In September 2023, the firm announced a $1.1 billion expanded share repurchase authorization, a signal of confidence in its free cash flow generation as it exits restructuring activities. The firm's structural differentiator lies in its vertically integrated silicon carbide manufacturing base, which it expanded by acquiring GT Advanced Technologies in 2021. This gives onsemi control over substrate production, a bottleneck in the EV power semiconductor supply chain, unlike competitors that rely exclusively on external suppliers. This captive supply strategy positions the firm as a direct, hard-to-substitute supplier for automakers retooling their platforms around electrification.
General information
Firm type
Asset Manager
Year founded
1999
AUM
Undisclosed
Location
Region
North America
Country
United States
City
Scottsdale
Corporate office
Scottsdale, AZ, United States
Principals
Hassane El-Khoury
President and CEO
Sector focus
Frequently asked questions
Who runs investment decisions at ON Semiconductor?
ON Semiconductor is a publicly traded corporation, not an investment fund. Capital allocation decisions are steered by CEO Hassane El-Khoury and the board of directors, with major strategic moves such as acquisitions and divestitures subject to board approval. The firm's transformation since late 2020 has been driven by El-Khoury's mandate to optimize the product portfolio around high-margin automotive and industrial end markets.
How is ON Semiconductor contributing to the electric vehicle supply chain?
The firm is a leading supplier of silicon carbide power modules and insulated-gate bipolar transistors needed for EV traction inverters and on-board chargers. Its 2021 acquisition of GT Advanced Technologies gave it in-house silicon carbide substrate production, a capacity that guarantees supply for automakers facing industry-wide chip constraints. Mercedes-Benz and other automotive OEMs have publicly named onsemi as a key supplier for next-generation electric platforms.
What is ON Semiconductor's asset-class mix?
As a semiconductor manufacturer, ON Semiconductor does not deploy capital into funds, direct investments, or co-investments. Its capital is allocated to research and development, manufacturing capacity expansion, share buybacks, and strategic M&A. The company's investment posture is centered on scaling its fab-lite semiconductor operations rather than managing a financial portfolio.
What industries does ON Semiconductor focus on?
Since the 2020 restructuring, the firm concentrates on two primary end markets: automotive (particularly electric vehicles and ADAS) and industrial (including factory automation, energy storage, and cloud power management). It explicitly exited commoditized transistor and low-margin consumer-facing businesses during this pivot.
Does ON Semiconductor operate any investment funds or family office structures?
No. ON Semiconductor is a publicly traded corporation (Nasdaq: ON) that designs, manufactures, and sells semiconductor components. It does not manage third-party capital, run a venture arm, or operate as a family office. Its primary 'deployment' is capital expenditure into its own fabrication and testing facilities.
What is the significance of the GT Advanced Technologies acquisition?
Acquired in 2021, GT Advanced Technologies provides onsemi with proprietary silicon carbide crystal growth technology. Controlling the substrate manufacturing process allows the firm to expand silicon carbide wafer output without relying on scarce external supply, putting it among a small group of companies with this complete vertical integration for EV power chips.
How should an allocator think about ON Semiconductor relative to EV and industrial electrification exposures?
Allocators often gain exposure to ON Semiconductor through public equities mandates, not direct private investments. The firm acts as a concentrated bellwether for the EV semiconductor value chain. A position in onsemi is effectively a bet on the adoption rate of electric vehicle platforms and industrial energy efficiency upgrades requiring high-voltage power management.
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