ON Semiconductor Corp at KeyBanc Technology Leadership Forum Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: John Vinh - KeyBanc Capital Markets Inc. - Analyst : Obviously, front and center, everyone's talking about the cycle. You know, it seems like you potentially finally found a bottom here. You're calling for a sequential growth into 3Q, and then you're still calling for an L-shape recovery. What are the signs that you're looking for an L-shaped recovery? What does an Onsemi L-shaped recovery look like?

Question: John Vinh - KeyBanc Capital Markets Inc. - Analyst : Right. Hassane, you've been pretty adamant about seeing an L-shaped recovery. What does that look like? And why are you still so adamant that L-shapes is in the cards, right, because obviously the macro backdrop right now looks pretty weak out there?

Question: John Vinh - KeyBanc Capital Markets Inc. - Analyst : I assume you're spending some time with your customers to just try to understand where they sit on inventories at this point in time. Do you feel like you've got a panel on how much more inventory needs to be stocked at this point? And are you -- do you have a sense of just other parts of your business that you think you're further through this inventory destocking than others? I'm just thinking maybe across IGBT, CIS.

Question: John Vinh - KeyBanc Capital Markets Inc. - Analyst : Hey, Thad. some of your peers out there have said that they're starting to contemplate refilling the channel because they've been so lean, and they want to be prepared for kind of an upswing. What do you need to see before you start refilling the channel? And also, where we are here right now in terms of channel inventories and what's normal for you?

Question: John Vinh - KeyBanc Capital Markets Inc. - Analyst : Just last question on inventory before we move on. I think one of your peers, I think, surprised a lot of people when they said that some of their customers want to keep as little as two weeks of inventory on a normalized basis. When you talk to your customers about what the new norm is. What's your sense of what that new norm is? Are we looking at levels above or below pre-pandemic norms?

Question: John Vinh - KeyBanc Capital Markets Inc. - Analyst : Questions. Maybe we can switch over and talk about EVs. I think on your last call, you said that at a recent China Motive Automotive Show, you guys kind of that 60% of kind of the new EVs introduced by China OEMs were Onsemi wins in silicon carbide. Obviously, the biggest China EV market in the world, but there's obviously a lot of angst and consternation about the China market, right? There's obviously a big push for domestic sourcing over there. They're obviously ramping a lot of silicon carbide capacity. Can you just help us think through and understand the China risk and how you're looking to manage through that China risk going forward?

Question: John Vinh - KeyBanc Capital Markets Inc. - Analyst : Right. Maybe if we take a step back and think about the overall market. I know Hassane, you've been in the auto industry for years even before you became CEO of Onsemi. It seems like we have maybe gotten a little bit of our over our skis in terms of what we thought the slope of the EV market is. Now that obviously we're working through this correction here, can you help us understand what's, what's the right trajectory that we should be thinking about going forward qualitatively in terms of the EV market going forward? And what are the challenges that we need to overcome as an industry to see greater adoption?

Question: John Vinh - KeyBanc Capital Markets Inc. - Analyst : Thad, maybe we can talk about silicon carbide gross margins. How much of a headwind is silicon carbide to your overall corporate margins today? And what's the path and timing for us to get to a creation there?

Question: John Vinh - KeyBanc Capital Markets Inc. - Analyst : And then you also had reiterated 53 percentage or long term target model. I would imagine kind of near term most of where you're sitting on gross margin is a function of under utilizations. But maybe can you just walk us through the bridge for how do we get from here to 53% longer term?

Question: John Vinh - KeyBanc Capital Markets Inc. - Analyst : Right. Speaking of higher gross margin products, I thought it was interesting that you recently mentioned, talked about kind of an analog mixed signal opportunity. Maybe, Haasane, you could just give us some perspective on just where did this come from? Was this part of the acquisitions that you've made of some of that ADI team in the past? And then what target and markets are you targeting? And when should we think about just the timing and ramp of the analog signal revenues?

Question: John Vinh - KeyBanc Capital Markets Inc. - Analyst : Right? I think we're out of time. Thank you guys.