IN Brief:
- onsemi's third-quarter revenue increased 11% to $1.722bn, with GAAP gross margin reaching 41.4%.
- Power Solutions Group revenue rose 21% to $889.9m, while AI data centre revenue increased 175% year on year.
- Fourth-quarter revenue is forecast between $1.715bn and $1.815bn.
onsemi reported third-quarter 2026 revenue of $1.722bn, an increase of 11% year on year, as demand strengthened across power semiconductors and industrial applications. Its Power Solutions Group recorded 21% annual revenue growth, while AI data centre revenue increased 175% from the corresponding period last year and 39% sequentially. Higher sales were accompanied by improved gross and operating margins.
Revenue rose from $1.551bn in the third quarter of 2025 and $1.604bn in the preceding quarter. The sequential increase was approximately 7%, while the annual comparison reflects different growth rates across the company’s power, analogue, mixed-signal, and sensing businesses.
GAAP gross margin reached 41.4%, compared with 37.9% a year earlier and 38.4% in the second quarter of 2026. The non-GAAP measure was 41.2%, compared with 38.0% in the corresponding period last year. The difference between the accounting measures reflects the adjustments applied in onsemi’s financial reporting and should not be treated as two interchangeable margin calculations.
Operating profitability also increased. GAAP operating margin reached 22.0%, compared with 17.0% a year earlier, while non-GAAP operating margin rose to 23.2%. The improvement occurred as onsemi continued changes to its manufacturing footprint and expanded deliveries of products serving higher-growth applications.
Power Solutions Group contributed $889.9m of quarterly revenue, up from $737.6m a year earlier. Its 21% annual increase made it the company’s fastest-growing reported segment and accounted for more than half of consolidated sales. The segment supplies power semiconductor products used to control and convert electrical energy across industrial equipment, vehicles, and computing infrastructure.
Electrical conversion systems use switching devices to regulate voltage and current between different parts of the equipment. Their conduction resistance, switching characteristics, and thermal behaviour influence the energy dissipated during operation. The balance between those characteristics depends on the voltage and current being handled, the conversion topology, and the switching frequency selected by the designer.
AI computing infrastructure introduces substantial power delivery demands because processors and accelerators require large currents at relatively low operating voltages. Electrical energy passes through several conversion stages before reaching the computing devices, with semiconductor selection affecting efficiency, cooling, and equipment density at each stage.
Changes in processing load also place demands on voltage regulation. Computing hardware can move rapidly between operating states, causing current requirements to change over short intervals. Power systems must manage the resulting electrical behaviour while maintaining the specified supply conditions, making switching devices, regulation circuitry, and physical interconnects important parts of the design.
onsemi reported AI data centre revenue growth of 175% year on year and 39% from the second quarter. These percentages describe changes in that business, rather than the proportion of total group sales attributable to AI infrastructure. The company did not provide a separate absolute AI data centre revenue figure in its principal results table.
Its Analog and Mixed-Signal Group generated $597.3m in quarterly sales, an increase of 2% year on year and 9% sequentially. Products in this segment support functions including signal conditioning, electrical measurement, interface control, and power management. Such circuits connect physical electrical signals with processing and control functions elsewhere in the electronic system.
Intelligent Sensing Group revenue reached $235.1m, compared with $230.0m a year earlier. The 2% annual increase was more modest than the expansion reported in Power Solutions, reflecting different demand conditions across the company’s semiconductor activities. Sensors remain integral to applications requiring measurement of light or other physical characteristics, but their sales followed a different growth pattern during the quarter.
The company also reported developments in power semiconductor applications outside computing. Sungrow selected onsemi’s EliteSiC hybrid power modules for its PowerTitan energy storage platform, where the devices support inverter operation. A three-level inverter arrangement can influence semiconductor voltage stresses, filtering requirements, and switching behaviour, although the performance achieved depends on the circuit implementation and selected devices.
GAAP net income attributable to shareholders rose to $313.9m from $255.0m in the third quarter of 2025. Diluted GAAP earnings per share increased from $0.63 to $0.79, while non-GAAP diluted earnings per share rose from $0.63 to $0.90. These measures reflect both operating performance and the financial adjustments included in the respective calculations.
Operating cash flow reached $516m, an increase of approximately 23% year on year. Free cash flow rose to $489m, compared with approximately $374m a year earlier, representing about 28% of quarterly revenue. The cash flow figures provide a separate measure of the resources generated by operations after the relevant investment expenditure.
onsemi expects fourth-quarter revenue between $1.715bn and $1.815bn. Its GAAP gross margin forecast is 41.4%–43.4%, with non-GAAP gross margin projected at 41.5%–43.5%. The company has also issued GAAP diluted earnings guidance of $0.88–$1.00 per share. These figures are forecasts rather than realised financial results.
The company has separately agreed to acquire integrated voltage regulator developer Ferric, adding technology intended for power delivery close to AI processors. That proposed transaction is a distinct development from the existing business’s quarterly performance and remains subject to its closing conditions.
Fourth-quarter results will establish whether the stronger demand for power devices and the improvement in operating margins continue through the final months of 2026. onsemi’s stated outlook maintains revenue close to the third-quarter level, with the precise outcome dependent on deliveries, manufacturing performance, and product mix.
