Published by Global Banking and Finance Review
Posted on August 4, 2025
(Reuters) -U.S. automotive chipmaker Onsemi on Monday forecast lackluster profit for the third quarter, after reporting a sharp decline in second-quarter revenue, sending its shares down by more than 10%.
Sales growth in battery electric vehicles has slowed due to an uncertain economic environment, brought on by global import duties, and elevated borrowing costs in the U.S.
Consumers have hit the breaks on big-ticket spending as tariffs threaten to increase the costs of automobiles by thousands of dollars and drive up inflation.
This has been forcing automakers to reassess production plans and withhold financial investments, affecting companies such as Onsemi.
The company acknowledged during its earnings call that the EV market remains soft, especially in North America and Europe, with recovery being slower than hoped.
However, Onsemi said it sees "signs of stabilization" across its end markets, after a prolonged slump in demand due to excess chip supply.
The company is among a select group of suppliers providing silicon carbide chips, which are critical for extending the range of EVs.
It added that it has not yet seen a broad-based recovery in automotive and expects only low single-digit growth in the third quarter.
An end to the $7,500 federal tax credit for electric cars has also cast a cloud over the EV industry's outlook, with some firms expecting a hit to the market growth.
Onsemi expects third-quarter adjusted earnings between 54 cents and 64 cents per share, compared with analysts' average estimate of 59 cents, according to data compiled by LSEG.
It forecast revenue of $1.47 billion and $1.57 billion for the third quarter, the midpoint of which is slightly above estimates of $1.50 billion.
The company's second-quarter revenue of $1.47 billion beat expectations of $1.45 billion, but fell about 15% from a year ago.
(Reporting by Kritika Lamba in Bengaluru; Editing by Shreya Biswas)
Explore more articles in the Finance category
