ON Semi Reports 45.2% Margins on CIS Products

SeekingAlpha publishes a transcript of Onsemi Q4 2021 earnings report. Few quotes:

"On the intelligent sensing front, our automotive imaging revenue grew by more than 20% quarter-over-quarter and approximately 40% year-over-year as we continue to see momentum in advanced safety with new design wins.

With consumers’ desire for additional safety features and an improved driving experience, we are seeing increased penetration of sensing in cars, including image sensors and ultrasonic sensing. At the same time, content per car is growing with each camera attached to one of our PMICs. We are also seeing accelerating demand for our imaging products for industrial and factory automation, in which revenue grew by approximately 10% quarter-over-quarter and 43% year-over-year. Industrial customers are investing in automation at an increased pace to improve efficiency and to reduce volatility in operations due to wage inflation and labor shortages, onshoring and social distancing mandates.

We have leveraged our experience in the automotive market to offer our industrial customers rugged, high resolution and high image quality sensors for the most demanding industrial applications. All of these execution vectors delivered a robust margin performance exceeding our target gross margin of 45% significantly ahead of schedule. This accelerated gross margin expansion was driven by a strong and accelerated execution in closing price-to-value discrepancy, cost reduction initiatives, a focused drive on ramping new products, a deliberate intent to shift more capacity to products for our strategic markets and operational efficiencies across our manufacturing footprint.

Revenue for Intelligent Sensing Group, or ISG, for the fourth quarter was $245.4 million, an increase of 18% year-over-year. GAAP gross margins for the fourth quarter was 45.1% and non-GAAP gross margin was 45.2%, a 370 basis point improvement quarter-over-quarter. The key contributors to our margin expansion have been favorable mix shift to higher margin and strategic products, elimination of price-to-value discrepancies in our portfolio and improved efficiencies in our manufacturing operations."