ON
New growth story, same old chipmaker?
ON Semiconductor just hit investors with a much bigger long-term script. The company said it now expects roughly $11 billion in revenue by 2030, with a 12% to 14% revenue CAGR — an upgrade from its prior 10% to 12% model. Translation: management thinks the next five years are going to be a lot juicier than it previously let on.
AI data centers are the main character
The headline grabber is AI infrastructure. ON expects AI data center revenue to more than double in 2026 and then double again in 2027. Management says the business could grow at least 10 percentage points faster than the broader AI data center market, helped by rising power demands and a shift toward high-voltage architectures.
A few numbers to make your eyebrows go up:
- AI data center revenue could rise from about $500 million in 2026 to more than $2.5 billion by 2030
- Semiconductor content per AI rack could jump from about $15,000 to over $115,000
- A new Vcore socket win is expected to start contributing by the end of 2026
That’s basically ON saying, “We’re not just selling chips, we’re selling picks and shovels for the AI gold rush.”
More than just AI glitter
The company also laid out growth plans for its other businesses. Automotive revenue is expected to grow about 9% annually through 2030, while industrial revenue is pegged for roughly 10% annual growth. ON also teased its Embedded Power Platform, which aims to deliver three to five times higher power density and begins sampling in 2026.
Margins matter too. ON is targeting a 53% gross margin and 38% operating margin under the new model, with capex running around 5% of revenue. CFO Thad Trent said recent price increases should help offset higher input costs over the next few quarters.
Why investors care
The stock popped more than 2% premarket, but the bigger story is whether this new roadmap helps the market re-rate ON from “cyclical chip name” to “AI power infrastructure lever.” Big picture: if management can execute, this isn’t just a better quarter — it’s a whole new narrative.