ON Semiconductor Corp. and GlobalFoundries announced a joint development and manufacturing partnership to create next‑generation gallium nitride (GaN) power devices, beginning with 650‑volt products. The collaboration will combine GlobalFoundries’ 200‑mm eMode GaN‑on‑silicon process with ON’s silicon drivers, controllers, and thermally enhanced packaging to deliver smaller, more efficient power systems for AI data centers, electric vehicles, renewable energy, and industrial applications.
The partnership focuses on a 650‑V GaN device that leverages GlobalFoundries’ eMode process to achieve higher power density and lower on‑resistance than current silicon‑based solutions. ON’s silicon drivers and packaging are designed to support high‑frequency operation and robust thermal management, enabling the devices to meet the demanding power and efficiency requirements of AI accelerators and high‑speed data‑center power supplies. Sampling of the new GaN products is slated for the first half of 2026, with commercial production expected to follow.
Strategically, the collaboration supports ON’s goal of replacing lower‑margin legacy products with high‑margin GaN solutions. The company’s AI data‑center business has been growing rapidly, and the partnership positions ON to capture a larger share of the expanding high‑efficiency power market. While ON’s Q3 2025 earnings report noted a 12% decline in total revenue to $1.55 billion, the AI data‑center segment was reported to be doubling year‑over‑year, underscoring the importance of the GaN partnership in sustaining growth in this high‑margin area. The partnership also strengthens ON’s competitive stance against Infineon and STMicroelectronics, both of which are investing heavily in GaN technology.
Financially, ON’s Q3 2025 results showed a non‑GAAP gross margin of 38.0% and an operating margin of 19.2%, a decline from the 45.5% gross margin and 28.2% operating margin reported in Q3 2024. The company beat earnings estimates by $0.04 per share, driven by cost controls and a favorable product mix that favored higher‑margin GaN and AI‑related components. However, revenue fell 4% YoY, largely due to a decline in legacy automotive and industrial segments, offset by growth in the AI data‑center market. The company’s Q4 2025 guidance projects revenue between $1.48 billion and $1.58 billion, with EPS between $0.57 and $0.67, reflecting confidence in maintaining profitability while investing in new product development.
Management emphasized that the collaboration will accelerate time‑to‑market for high‑efficiency power solutions and support ON’s broader strategy of focusing on high‑growth verticals. CEO Hassane El‑Khoury highlighted the importance of “winning across the entire power spectrum” to capture share in automotive, industrial, and AI data‑center markets. While the financial terms of the partnership were not disclosed, the company indicated that the collaboration will involve shared manufacturing capacity and joint development of packaging and driver solutions. The partnership is expected to begin sampling in early 2026 and to expand into higher‑voltage and higher‑power devices as the technology matures.
The announcement was well received by investors, with ON’s shares rising 3.37% in pre‑market trading to $55.13. The positive market reaction reflects confidence that the GaN partnership will strengthen ON’s high‑margin product portfolio and support its AI data‑center growth trajectory, despite the broader revenue decline in other segments.
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