At a time when the global semiconductor industry is undergoing profound changes, a series of actions by Onsemi have attracted wide attention from the industry. The company announced layoffs of about 1,000 jobs and consolidation of nine factories, while at the same time massively expanding production capacity in places such as the Czech Republic and South Korea, investing billions of dollars. Behind this seemingly contradictory move, in fact, there is a deep logic of the company's strategic adjustment.
According to onsemi's fourth-quarter and full-year 2023 earnings report, the company's fourth-quarter revenue was $2,018.1 million, and the GAAP and non-GAAP gross margin was 46.7%, indicating the company's solid financial position. However, in the face of the weakness of the global automotive market and the problem of excess inventory of customers, the company needs to optimize resource allocation and improve operational efficiency. Layoffs may be a prelude to the company's layout in new technologies and new markets, and through internal structural adjustments, it will accumulate strength for future expansion and transformation.
In stark contrast to the layoffs, onsemi has expanded massively in the silicon carbide (SiC) space. According to The Paper, the company's expanded silicon carbide plant in Roznov, Czech Republic, has been completed, and the production capacity will gradually increase by 16 times in the next two years, and 200 new jobs will be created by the end of 2024. In addition, onsemi plans to expand its silicon carbide plant in Bucheon, South Korea, to meet growing market demand. These expansions demonstrate that onsemi is aggressively investing in high-growth areas such as new energy vehicles, renewable energy and AI data centers to seize market opportunities.
Figure: onsemi is laying off employees and expanding production capacity over and over again, what is the development strategy?
What is the reason for this? China Exportsemi Net tries to provide you with an in-depth analysis:
1. Market Demand and Capacity Adjustments: Onsemi's layoffs and expansions have been parallel, reflecting the company's keen insight and rapid response to changes in market demand. Against the backdrop of a global automotive market downturn, the company is preparing for future market recovery and new business expansion by optimizing internal resources.
2. Technology leadership and market share: As a next-generation semiconductor material, silicon carbide has higher efficiency and performance. onsemi's active layout in this field shows the company's determination in technological innovation and market share, and is expected to occupy a favorable position in the future semiconductor industry competition.
3. Risk Management and Cost Control: Against the backdrop of increasing global economic uncertainty, Onsemi's layoffs are also a risk management strategy. By reducing operating costs, companies can better respond to market volatility and maintain a sound financial position.
4. Long-term development and short-term challenges: Despite the short-term market weakness and performance pressures, Onsemi's long-term development strategy remains clear. Through technological innovation and market expansion, the company is expected to achieve sustainable development in the long term.
In summary, Onsemi's layoffs and expansions are a strategic adjustment of the company in the transformation of the global semiconductor industry. By optimizing resource allocation and aggressively deploying in emerging markets, Onsemi is expected to maintain its leading position in the fierce market competition. At the same time, the company also needs to balance short-term performance pressure and long-term development goals to achieve steady and sustainable development. Although the layoffs have sparked some controversy, in the long run, this strategy may be the only way for the company to transform and seize the commanding heights of future development. In the future, Onsemi's market performance and strategy execution are worthy of our continued attention.
