ON Semiconductor rises as Citi defends over Tesla worries
Justin Sullivan


ON Semiconductor (NASDAQ:ON) shares rose fractionally on Friday, erasing some of Thursday's losses, as Citi defended the semiconductor company after Tesla (NASDAQ:TSLA) said it found a way to use 75% less silicon carbide in its next-generation powertrain.
Analyst Christopher Danely, who has a buy rating and per-share price target on $95 on ON (ON), said that not only does ON (ON) have long-term supply agreements with its customers that last between four and five years, it's likely Tesla's (TSLA) claims would be for a future cheaper vehicle.

"So, we believe the sky is not falling," Danley wrote in an investor note. "We maintain our view that ON is still on track to achieve silicon carbide sales of $1 billion (roughly 13% of sales) in 2023."
Tesla's (TSLA) president for powertrain engineering Colin Campbell said during the company's investor event that silicon carbide is an "amazing semiconductor," but it's expensive and "really hard" to scale, so using 75% less of it in cars is a "big win for us."
On Thursday, Roth MKM also defended ON Semiconductor (ON), noting there is a "good chance" Tesla's (TSLA) claims may not materialize or the entire silicon carbide industry benefits.