Operating Efficiencies Drive Growing Profits for ON Semiconductor
ON Semiconductor Corporation announced that total revenue in the first quarter of 2018 was $1,377.6 million, down approximately 4 percent compared to GAAP revenue in the first quarter of last year. First quarter 2018 revenue was up approximately 7 percent compared to non-GAAP revenue in the first quarter of last year, which excluded the one-time impact from a change in revenue recognition to the "sell-in" method from the "sell-through" method. First quarter 2018 revenue was approximately flat as compared to revenue in fourth quarter of 2017.
"We delivered strong revenue and margin performance in the first quarter. We are seeing an upwards inflection in long-term demand for our products, driven by strengthening engagement with our customers on their long-term strategic projects and broad-based acceptance of our products for automotive and industrial markets," said Keith Jackson, president and CEO of ON Semiconductor.
"Along with robust revenue performance, we continue to deliver impressive margin performance driven by solid execution, improving mix, and operating leverage. We continue to make strong progress towards our target financial model.
"Sustained demand has put pressure on the semiconductor industry's supply chain. We are pro-actively investing in our operations to further strengthen our industry leading cost structure and to ensure supply for our customers,” concluded Jackson.
Bernard Gutmann, Executive Vice President, Chief Financial Officer added, “We continue to see solid strength in our business. Indications from our customers and macroeconomic data point to continuing strength in demand for our products in near to midterm. Our design win pipeline continues to expand, driven by a strong product portfolio for emerging and fast growing applications in the automotive and industrial end markets.
“Global macroeconomic environment remains highly favorable, and we are seeing strong demand from all geographies. We see an upwards inflection in long term demand for our products, especially for automotive and industrial end markets.
“This inflection in demand is driven by strong traction of our power management products for medium and high voltage applications. We continue to further strengthen our position in imaging market for automotive and industrial applications and demand outlook for our imaging products continues to strengthen.
“We have established ourselves as a strategic long term partner for our customers and our customers are increasingly relying on us to meet long term demand for power management and sensor semiconductor products.
“With increasing strategic engagement with us, many customers are now asking us to enter into long term supply agreements. Accelerating long term demand for our products and customer requests for long-term supply agreements necessitate us to increase the level of investment in our manufacturing capacity,” Gutmann observed.