ELECTRONIC NEWS HIGHLIGHT W09.2025

1. Onsemi will streamline operations in 2025 amid falling fourth-quarter profits

Onsemi, a leading supplier of smart power and sensor chips, reported a drop in fourth-quarter 2024 profits and announced plans to streamline operations in 2025, although it did not provide further details.

The company’s sales were affected by weak performance in the automotive and industrial sectors. Onsemi’s net profit in the fourth quarter was $379 million, down from $562 million in the same period last year. Fourth quarter revenue reached $1,722 billion, down 14.6% from the previous year’s 2018 billion and down 2.2% from the previous quarter’s $1,762 billion.

For 2024, onsemi revenue falls to $7082 billion, down 14.2% from $8253 billion in 2023. Net profit drops from $2184 billion in 2023 to $1573 billion in 2024.

Chief Executive Officer Hassane El-Khoury stated that the company is well prepared to handle long-term fluctuations and is currently experiencing a market downturn. Looking ahead to 2025, he noted that the outlook remains uncertain, adding, “We will maintain financial discipline, streamline operations and continue to deliver differentiated, high-value smart energy and sensor solutions to further enhance onsemi’s competitive position.”

Onsemi’s announcement mirrors similar reports from NXP and STMicroelectronics, both of which serve the automotive and industrial markets. The companies also reported weak results for the fourth quarter of 2024 and disclosed cost-cutting measures, including layoffs.

Onsemi forecasts revenue will continue to decline in the first quarter of 2025. The midpoint of the forecast shows revenue will decline 24.8% compared to the first quarter of 2024.

Learn more: Onsemi will streamline operations in 2025 amid falling fourth-quarter profits

2. The automotive semiconductor industry faces oversupply

The global auto industry, already struggling with semiconductor shortages after the COVID-19 pandemic, is now facing a chip glut. Analysts at NXP Semiconductors have forecast a slowdown in demand across the industry.

NXP reported a 6% year-over-year decline in automotive semiconductor demand. Similarly, Switzerland-based STMicroelectronics and US-based Texas Instruments reported weaker performance in the fourth quarter of 2024. STMicroelectronics highlighted a 28% decline in revenue from digital integrated circuits and RF products, citing weaker demand for advanced driver assistance systems ADAS and infotainment. Texas Instruments also recorded a slight decline in the automotive sector, due to slowing global demand.

Automakers are now adjusting their inventories to respond to changing demand. This adjustment follows the semiconductor shortage the auto industry has experienced in the wake of the pandemic. From 2020 to 2023, demand for electronic devices spiked due to increased remote working and learning, exacerbating chip shortages. Global events such as the rise of cryptocurrencies, natural disasters, and the Russia-Ukraine conflict also contribute to supply-demand imbalances.

To address the shortage, chipmakers have ramped up production. However, a significant drop in demand has led to a chip glut. Vinay Balkrishna Shenoy, chief executive officer at Infineon India, recently admitted to falling demand for auto chips, he said: “We can see that many customers are cutting back on semiconductor inventories and global auto production forecasts have softened slightly” .

Learn more: The automotive semiconductor industry faces oversupply

3. Global semiconductor sales exceed $600 billion by 2024, reaching record high

According to the latest report from the Semiconductor Industry Association (SIA), global semiconductor sales reached $627.6 billion in 2024, up 19.1% year-on-year, marking a record high. Fourth-quarter sales totaled $170.9 billion, up 17.1% year-over-year and up 3% quarter-over-quarter. However, sales in December fell 1.2% from the previous month to $57 billion.

John Neuffer, president and CEO of SIA said :”The global semiconductor market surpassed $600 billion in annual sales for the first time in 2024, setting a new record. Double-digit growth is expected to continue in 2025, with strong long-term prospects for the industry”.

By region, sales increased in the Americas (44.8%), China (18.3%) and other Asia-Pacific markets (12.5%), while Japan (-0.4%) and Europe (-8.1%) saw declines. In December, sales increased 3.2% in the Americas but fell in China (-3.8%), Japan (-4.7%), Europe (-6.4%) and other Asia-Pacific regions (-1.4%).

SIA noted that with the growth of the global semiconductor market, US domestic chip manufacturing capacity is expected to triple by 2032.