ON Semiconductor Corp. (onsemi) saw its shares surge 8% on Wednesday, reaching $100.76, after the company announced expanded partnerships with Geely Auto Group and NIO Inc. to supply advanced silicon carbide (SiC) chips for next-generation electric vehicles (EVs). The deals, which focus on 900-volt (900V) vehicle platforms, underscore onsemi's deepening foothold in China's rapidly evolving EV market.
Strategic Partnerships with Geely and NIO
Onsemi revealed a broader collaboration with Geely to provide its EliteSiC power technology for vehicles built on Geely's SEA-S platform. This follows a separate agreement with NIO, announced on Monday, where onsemi's EliteSiC M3e technology will enable NIO to transition from 400V to 900V architecture. NIO's flagship ES9 SUV and other models slated for the 2026 Beijing Auto Show will feature the new chips.
CEO Hassane El-Khoury emphasized the importance of system efficiency and scalability as the EV industry matures. Geely CEO Gan JiaYue noted that closer coordination with technology partners is increasingly critical. NIO's Alan Zeng highlighted the shift from early 400V systems to today's 900V platforms.
Market Context and Financials
The stock jump pushed onsemi's market capitalization to approximately $41.2 billion, ahead of its first-quarter earnings report scheduled for May 4. The company's fourth-quarter revenue fell 11% year over year to $1.53 billion, with first-quarter guidance set between $1.435 billion and $1.535 billion. Management highlighted $1.4 billion in free cash flow for 2025, earmarked for share buybacks.
The broader semiconductor sector also rallied, with the Philadelphia SE Semiconductor Index rising 1.5%. NXP Semiconductors surged 25% after issuing a strong second-quarter outlook. Bret Kenwell, an analyst at eToro, noted that semiconductors have been doing much of the heavy lifting in the market.
Investor Sentiment and Analyst Views
While Wall Street's mood has brightened, some analysts remain cautious. Morgan Stanley's Joseph Moore raised his price target for ON Semiconductor to $85 from $64 but maintained an Equal Weight rating, warning that expectations are high heading into the May 4 report.
The deals come at a time when EV demand remains uneven, and partnership announcements do not guarantee immediate revenue. Onsemi has not disclosed financial details, shipment volumes, or production timelines for the Geely and NIO agreements. Investors will look to the upcoming earnings call for concrete guidance.
Technology and Implications
Silicon carbide chips enable higher voltage management with less energy loss compared to traditional silicon. The 900V systems can boost efficiency, extend driving range, and reduce charging times. This technology is critical as automakers push for faster charging and longer-range EVs.
Onsemi's ability to secure consecutive deals with major Chinese automakers positions it well in the competitive EV chip market, but the path to revenue realization remains uncertain. The May 4 earnings report will be the next key catalyst for the stock.
