William Blair analyst Jed Dorsheimer downgraded ON Semiconductor to Market Perform from Outperform without a price target. The analyst says the increase in cost of capital globally undermines his confidence in the auto and industrial end markets served in ON’s traditional businesses. His research suggests the company continues to struggle with GT Advanced Technologies. ON’s silicon carbide yields are half Dorsheimer’s original assumptions and his concern is that the combination of the traditional business weakness and lower SiC yields could push gross margin to the company’s stated "worst case scenario" of 45%, or below.
Published first on TheFly
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