Monday, November 06, 2017

ON Semi Q3 2017 Earnings Call

SeekingAlpha publishes ON Semi Q3 2017 earnings call transcript. Few quotes:

"As we announced last quarter, we have monetized our mobile CMOS image sensor IP, and another announcement related to divestiture of another business should come out shortly.

Third quarter communications revenue was negatively impacted by our exit from the mobile image sensor market in the second quarter of 2017.

We are seeing strong growth for our PYTHON line of image sensors for machine vision applications.

Then, in the Q&A session:

Vivek Arya - Bank of America Merrill Lynch: terms of the competitive landscape, we have heard more noise coming out of Sony in terms of their intention to compete in the automotive image sensor market. I understand these relationships with customers tend to be long-term, so there's probably no change in the near-term. But just longer term, how do you see your technology position in the automotive image sensor market versus Sony or any other competitor?

Keith D. Jackson - CEO, ON Semi:

Yes. We continue to drive technologies specific to automotive that we think are a competitive advantage across the board. We also have many years of experience in automotive reliability and quality, along with cyber security and functional security. So, we think we've got a lead there that we can maintain with continued investments specific to the automotive industry.

Vivek Arya - Bank of America Merrill Lynch:

And the same question from a cost perspective, how do you think your cost basis compares with some of your competitors who might have higher volumes just because they are engaged in the smartphone industry?

Keith D. Jackson - CEO, ON Semi:

Yes. We believe we continue to be cost-competitive there, having driven like we do in all of our product lines, very good supply chains, and very good manufacturing efficiencies.

Shawn M. Harrison - Longbow Research LLC:

How much of just walking away from mobile image sensor business did that cost you into the September quarter?

Keith D. Jackson - CEO, ON Semi:

...the direct revenue quarter-on-quarter between two and three was a $12 million reduction that we saw in that. From a year earlier, it was much higher but quarter-on-quarter about $12 million.

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