onsemi Sees Clear Inflection Point with Record Q1 Revenue and Margin Expansion
onsemi, the leader in intelligent power and sensing technologies, has marked a significant inflection point in its business performance with its Q1 2026 results. The company's revenue reached $1.51 billion, surpassing guidance, driven primarily by growth in AI data center demand. Non-GAAP diluted earnings per share also came in at $0.64, a notable improvement.
The key highlight of the quarter was the expansion of onsemi's gross margin for the third consecutive period, reaching 38.5%. This achievement is a direct result of the company's strategic efforts to restructure its business over the past few years, which have now begun to yield tangible financial results. The improved gross margin demonstrates the effectiveness of onsemi's lean cost structure and focused portfolio in driving operating leverage.
CEO Hassane El-Khoury noted that this quarter marks a clear turning point for onsemi, citing improving demand signals, accelerating AI data center growth, and sustained gross margin expansion as evidence. He expressed confidence that the current cycle has reached its low point and is now on the path to recovery. This sentiment is supported by the strengthening order patterns and increase in short lead time orders observed during the quarter.
The Treo platform continues to accelerate, with revenue increasing more than 2.5 times sequentially in Q1. This growth reflects broader adoption across high-volume automotive, industrial, and AI applications. Notably, Treo design wins are supporting the transition to software-defined vehicles, further reinforcing its penetration in these markets.
onsemi's overall GaN solutions design funnel now exceeds $1.5 billion, supported by a rich product portfolio spanning 40 to 1,200 volts. With internal GaN development and foundry partnerships, the company has established a differentiated roadmap and resilient supply chain. This positions onsemi to begin ramping in these markets with revenue starting in 2027.
In automotive, onsemi began production shipments of its Treo-based and 10BASE-T1S Ethernet solutions for a leading North American customer's next-generation zonal architecture. These initiatives demonstrate the company's commitment to supporting the shift towards software-defined vehicles and its leadership in intelligent power and sensing technologies.
