Chipmaker Onsemi delivered better-than-expected sales and profit forecasts on Monday, sending its shares to record highs after shifting their focus to their highest-profit products.
The results come as chief executive Hassan Al-Khouri, who took over late last year, reset the company’s strategy to zero in areas including sensors for power electronics and driver-assistance technologies for electric vehicles. Is.
Onsemi makes some of its chips from silicon carbide, a new and attractive material that is key to helping electric vehicles achieve better range. The company said on Monday it has closed its $415 million deal to buy GT Advanced Technologies (GTAT), a supplier of raw materials for the chips.
The move will help reduce Onsemi’s need for raw materials from Wolfspeed, which supplies silicon carbide to many chip makers but also sells its own chips directly to automakers.
“I don’t want to be in that tug of war,” El-Khouri told Reuters in an interview. “By the end of ’22, the majority of our silicon carbide revenue will be on GATAT.”
Onesemi, which makes about 70% of its own chips, is working to bring factories online with more capacity. But Al-Khouri believes that the company will not be able to meet the demand of automakers until at least 2023.
“We’re not going to 100% of what customers want in ’22. We’re still going to have a supply disruption,” he said.
With the company’s fourth-quarter revenue and adjusted profits at midpoints of $1.79 billion and 95 cents per share, according to IBES data from Refinitiv, Onesemi’s Shares closed up 14.3% at $54.99.
For the third quarter ended October 1, Onesemi reported sales of $1.74 billion and adjusted profit of 84 cents per share, up from estimates of $1.71 billion and 74 cents per share, according to Refinitiv data.
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