ON Semiconductor and Innoscience have entered into a memorandum of understanding to jointly develop and commercialize gallium nitride (GaN) power devices, beginning with 40‑200 V products. The collaboration will combine ON’s integrated systems, driver, and packaging expertise with Innoscience’s 200‑mm GaN‑on‑silicon process and high‑volume manufacturing leadership, positioning the two companies to deliver cost‑effective, energy‑efficient solutions for industrial, automotive, telecom infrastructure, consumer, and AI data‑center markets.
The partnership will leverage Innoscience’s world‑largest 8‑inch GaN‑on‑silicon wafer capacity to accelerate the production of ON’s GaN offerings. ON expects to bring samples to market in the first half of 2026 and to scale worldwide production during that period, thereby expanding its presence in the rapidly growing GaN power device market, which is projected to reach $2.9 billion by 2030 with a 42% compound annual growth rate from 2024 to 2030.
ON’s recent quarterly results provide context for the partnership’s strategic importance. In Q3 2025, the company generated $1.5509 billion in revenue, a decline from $1.7619 billion in Q3 2024, reflecting broader macro‑economic headwinds and pricing pressure in legacy segments. However, the company’s non‑GAAP earnings per share rose to $0.63 from $0.93, a beat of $0.30 against consensus estimates of $0.33, driven by disciplined cost management, a favorable product mix shift toward higher‑margin GaN and AI‑centric solutions, and improved operational leverage as volumes increased.
Gross margin for the quarter stood at 38.0%, slightly lower than the 38.5% margin reported in the prior year, largely due to higher raw‑material costs and the need to invest in new manufacturing capabilities. Free cash flow reached $372.4 million, up from $310 million in Q3 2024, underscoring the company’s ability to generate cash even amid margin compression. For Q4 2025, ON guided revenue of $1.5 billion to $1.6 billion and EPS of $0.57 to $0.67, maintaining confidence in its growth trajectory while acknowledging ongoing macro‑economic uncertainty.
CEO Hassane El‑Khoury highlighted the partnership’s role in accelerating ON’s vertical GaN (vGaN) platform, which can reduce energy loss by up to 50% and is positioned for high‑impact applications in AI data centers, electric vehicles, renewable energy, and aerospace. The company’s focus on high‑efficiency power solutions aligns with the projected demand for GaN in next‑generation electronics, and the partnership is expected to strengthen ON’s competitive positioning against peers such as STMicroelectronics, which also collaborates with Innoscience.
The collaboration with Innoscience is a strategic move that expands ON’s manufacturing footprint and accelerates time‑to‑market for GaN products. By combining ON’s system‑level expertise with Innoscience’s manufacturing scale, the partnership is poised to capture a larger share of the $2.9 billion GaN market and to support the company’s broader strategy of delivering integrated power solutions across automotive, industrial, and AI sectors.
In summary, the ON‑Innoscience partnership represents a significant step forward for ON Semiconductor’s GaN strategy, providing the manufacturing capacity and product expertise needed to meet growing demand for high‑efficiency power devices. The collaboration is expected to enhance ON’s market position, support its financial performance, and drive future growth in key high‑margin segments.
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