- Mizuho analyst Vijay Rakesh maintained ON Semiconductor Corp ON with a Buy and raised the price target from $72 to $79 after attending its SiC (silicon carbide) fab expansion event in NH.
- He saw ON as well-positioned with its strong Auto/Industrial (EV, SiC, etc.) position, focus on accretive growth, and tight supply.
- Firstly, ON increasing its Hudson GTAT SiC capacity 5x by YE2022 to support $4 billion committed revenue, ramping Bucheon, Korea device/ Epi facility 3x in 2023, and 2x in 2024.
- Also Read: ON Set To Gain From Winning Tesla As Customer, Expand Valuation According To Analysts Who Bumped Up Price Targets
- Secondly, ON's in-house SiC will likely drive profitability and supply assurance for OEM customers with the backlog.
- Thirdly, ON's roadmap to 200 million in 2024 without incremental Capex.
- Fourthly, ON sees a potential SiC TAM of $6.5 billion, at a 33% five-year CAGR.
- Price Action: ON shares traded higher by 0.13% at $71.26 on the last check Monday.
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