2024-03-05 21:15:12 ET
ON Semiconductor Corporation (ON)
Morgan Stanley Technology, Media & Telecom Conference
March 5, 2024 17:50 PM ET
Company Participants
Hassane El-Khoury – Chief Executive Officer
Thad Trent – Chief Financial Officer
Conference Call Participants
Joe Moore – Morgan Stanley
Presentation
Joe Moore
Everybody, I’m Joe Moore, again, Morgan Stanley semiconductor research. Very happy to have the executive team from ON Semiconductor, Hassane El-Khoury, CEO; and Thad Trent, CFO.
So I wonder if you guys could just start out. You’ve overseen a pretty big transformation. This company has much higher profitability than we had seen historically. You’re going even through a period of low utilization now and you’re maintaining those margins. Can you talk about what you did to get us to this point, and then we’ll go into some of the details?
Hassane El-Khoury
Sure. The last couple of years, we’ve been dealing with a lot of things, obviously, we’ve had the height of the pandemic, which saw a lot of shortages that we were able to support customers, so we took the opportunity to accelerate the transformation. So some of the components that we’ve done is, one, we walked away from a lot of the business that you typically would see as commodities, where our focus right now on our portfolio is being able to extract the value and therefore, the customers see value. If customers don’t see value in the product, that’s a product that we’re not going to continue, number one, to support; and two, to invest R&D dollars in.
So we went through a very big, large portfolio focus, portfolio rationalization. Following that, once you have the right portfolio, then you go and say, okay, what is the manufacturing footprint that we need to support that growth? And due to that, we ended up divesting 4 subscale fabs and acquiring a 12-inch fab. So again, a mix shift, a more healthy 12-inch. I guess, I got the microphone....
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ON Semiconductor Corporation (ON) Presents at Morgan Stanley Technology, Media & Telecom Conference (Transcript)