onsemi reported second-quarter 2026 revenue of $1.604 billion, up 9% year-over-year, with revenue, gross margin and earnings per share coming in above the midpoint of the company’s guidance. GAAP gross margin reached 38.4%, while non-GAAP gross margin was 39.3%. GAAP operating margin was 16.1%, with non-GAAP operating margin reaching 20.8%.

Profitability improved faster than revenue, with GAAP diluted EPS of $0.56 and non-GAAP EPS of $0.74. Management said year-over-year EPS growth was four times the rate of revenue growth, reflecting gross-margin expansion and continued cost discipline.

Cash generation was particularly strong. Cash from operations increased 150% year-over-year, while free cash flow quadrupled to $425.4 million. This represented a free cash flow margin of approximately 27%, compared with roughly 7% a year earlier. onsemi repurchased $332 million of shares during the quarter, bringing year-to-date shareholder returns to approximately 105% of free cash flow.

AI data centers remain onsemi’s fastest-growing business, with the company now expecting AI data center revenue to more than double in 2026. Growth is being driven by increasing adoption of its intelligent power portfolio across the data-center power tree, including high-voltage power solutions, EliteSiC silicon carbide devices, silicon MOSFETs, controllers and its recently introduced GaN portfolio.

The company highlighted an expanded role in the NVIDIA MGX ecosystem as AI infrastructure power requirements increase. It also secured strategic AI data-center platform wins with Great Wall, a major Chinese cloud-infrastructure power supplier, expanding its content in EliteSiC, silicon MOSFETs and controllers. These wins indicate that onsemi is positioning its portfolio across multiple stages of AI power conversion rather than relying on a single device category.

onsemi also launched GaNEXUS, its GaN power portfolio covering voltages from 40 V to 650 V and targeting AI data centers, robotics and industrial infrastructure. The addition of GaN alongside the company’s established silicon and SiC portfolios broadens its ability to address different voltage and switching-frequency requirements across emerging high-density power architectures.

Beyond AI, onsemi reported continued automotive design activity, including an expanded role in Rivian’s R2 platform for zonal power distribution and onboard charging. The company also announced its planned acquisition of Synaptics, which is intended to add connected-compute capabilities and expand its addressable market in physical AI while complementing its existing power and sensing businesses.

For the power semiconductor market, the results provide another indication that AI infrastructure is becoming a meaningful growth engine for suppliers traditionally exposed primarily to automotive and industrial markets. onsemi’s combination of silicon MOSFETs, SiC, GaN, gate/control technologies and high-voltage solutions gives it exposure across an increasingly complex AI data-center power chain, while the expected doubling of AI data-center revenue in 2026 suggests this market is beginning to have a material impact on the company’s growth profile.

Original – onsemi