As global chip shortages persist, reshaping the semiconductor industry, companies are navigating a landscape characterized by fluctuating demand and intense competition. ON Semiconductor Corp ( ON ) stands at the forefront of this challenge, implementing strategic adjustments to maintain its market position.

ON is consolidating in a tight range. See real-time price here.

On Monday, ON Semiconductor reported its fiscal second-quarter results. The company's gross margins could continue to be under pressure through 2025 due to under-absorption as well as competitive pricing to "defend and gain share in key markets," according to Needham.

The ON Semiconductor Analyst: Analyst Quinn Bolton reaffirmed a Buy rating, while cutting the price target from $57 to $50.

The ON Semiconductor Thesis: The company's Industrial segment began showing signs of recovery, with an uptick in bookings towards the end of the quarter, as well as growth in the Aerospace & Defense (A&D) and Medical end markets, Bolton said in the note.

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"Although most of the headwinds in the Industrial segment seem to be in the rearview mirror, management did point out pockets of weakness largely attributed to macro uncertainty," he wrote.

ON Semiconductor executed a 12% capacity reduction and a 9% reduction in workforce, the analyst stated. These structural changes are being made to improve gross margins when demand returns, he added.

ON Price Action: ON Semiconductor shares were down 0.53% at $47.71 at the time of publication on Tuesday, according to Benzinga Pro.

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