As the second-quarter earnings season comes to a close, we’re taking a deep dive into the top and bottom performers in the analog semiconductor industry, featuring ON Semiconductor and its peers. The demand for analog chips is closely tied to the overall economic growth rate, as they serve as the foundation for most electronic devices and equipment. Unlike digital chip designers, analog chip manufacturers typically produce most of their own chips, as analog chip production doesn’t require cutting-edge technology. With less reliance on major secular growth drivers, analog product cycles tend to be longer, often spanning 5-7 years.
Among the 15 analog semiconductor stocks we track, the Q2 results were mixed. As a group, revenues exceeded analysts’ consensus estimates by 1%, while next quarter’s revenue guidance fell short by 1.2%. The recent inflation rate reduction by the Federal Reserve, coupled with a 50bps rate cut in September 2024, has sparked debate about the timing and potential impact on the economy. Despite this, analog semiconductor stocks have remained steady, with average share prices relatively unchanged since the latest earnings results.
ON Semiconductor, a global provider of analog chips specializing in automotive, industrial, and cloud data center applications, reported revenues of $1.74 billion, a 17.2% year-over-year decline. Although the results met analysts’ expectations, the company’s revenue guidance for the next quarter was underwhelming, and inventory levels increased. ON Semiconductor’s stock has risen 1.8% since reporting and currently trades at $71.45.
Himax Technologies, a Taiwan-based manufacturer of display driver chips and timing controllers, reported revenues of $239.6 million, a 2% year-over-year increase, exceeding analysts’ expectations by 2.9%. Despite a strong quarter, the stock has fallen 4.3% since reporting and currently trades at $5.61.
Universal Display, a provider of organic light-emitting diode (OLED) technologies, reported revenues of $158.5 million, an 8.1% year-over-year increase, meeting analysts’ expectations. However, the company’s EPS estimates and full-year revenue guidance fell short, causing the stock to decline 2.3% since reporting and currently trading at $207.60.
Monolithic Power Systems, an analog and mixed-signal chipmaker specializing in power management chips, reported revenues of $507.4 million, a 15% year-over-year increase, topping analysts’ expectations by 3.4%. The company’s strong quarter was marked by optimistic revenue guidance for the next quarter and a decent beat of analysts’ EPS estimates, sending the stock up 18.1% since reporting and currently trading at $928.22.
Texas Instruments, the world’s largest producer of analog semiconductors, reported revenues of $3.82 billion, a 15.6% year-over-year decline, meeting analysts’ expectations. Despite a slower quarter, the stock has risen 1.8% since reporting and currently trades at $201.81.
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