The law firm of Kessler Topaz Meltzer & Check, LLP informs investors that today the firm has filed a securities fraud class action lawsuit against ON Semiconductor Corporation (NASDAQ: ON) (“onsemi”) on behalf of investors who purchased or acquired onsemi common stock between May 1, 2023, and October 27, 2023, inclusive (the “Class Period”). This action, captioned Hubacek v. ON Semiconductor Corporation., et al., Case No. Case 1:23-cv-01429-GBW, was filed in the United States District Court for the District of Delaware and is pending before the Honorable Gregory B. Williams.

Important Deadline Reminder: Investors who purchased or otherwise acquired onsemi common stock during the Class Period may, no later than February 12, 2024, move the Court to serve as lead plaintiff for the class.

CLICK HERE TO SUBMIT YOUR ONSEMI LOSSES. YOU CAN ALSO CLICK ON THE FOLLOWING LINK OR COPY AND PASTE IN YOUR BROWSER: https://www.ktmc.com/new-cases/on-semiconductor-corporation?utm_source=PR&utm_medium=link&utm_campaign=on&mktm=r

LEAD PLAINTIFF DEADLINE: FEBRUARY 12, 2024

CLASS PERIOD: MAY 1, 2023, THROUGH OCTOBER 27, 2023

CONTACT AN ATTORNEY TO DISCUSS YOUR RIGHTS:

Jonathan Naji, Esq. (484) 270-1453 or Email at info@ktmc.com

ONSEMI’S MISCONDUCT

onsemi manufactures and sells semiconductor components for various electronic devices worldwide, including power and sensing solutions, and technologies for the electrification of the automotive industry. Critical to onsemi’s long-term growth and success is its strategy to focus on the development, manufacture, and sale of a variety of products incorporating silicon carbide (“SiC”). A substantial portion of onsemi’s SiC products are necessary components of a number of systems used in the production of electric vehicles (“EVs”). Throughout the Class Period, Defendants made repeated misrepresentations to investors regarding the “stability” and “visibility” of the demand for onsemi’s SiC and other products, and the sustainability of onsemi’s revenue growth, by overstating the impact of onsemi’s long-term supply agreements (“LTSAs”) on the achievability of its revenue streams.

On May 1, 2023, the first day of the Class Period, onsemi released its first quarter 2023 earnings and accompanying investor earnings call with equity analysts. During that call, Defendants spoke extensively on the growth of onsemi’s SiC business and touted the fact that the company has “more and more confidence” in its claim that it would reach $1 billion in annual revenue for its SiC products in 2023. Specifically, Defendants explained that onsemi’s outlook was “actually very, very predictable,” which was “the benefit that we’ve been talking about with the LTSAs that have us really, with our customers, align on pricing and volume through the duration of the LTSAs.”

Thereafter and throughout the Class Period, Defendants continued to tout onsemi’s sales of SiC products, particularly to EV manufacturers. Defendants lauded onsemi’s LTSAs for the “extended visibility” and the “very, very clear view of where demand is,” aiding Defendants in their ability to effectively manage changing macroeconomic conditions and sustain onsemi’s revenue growth targets. Indeed, Defendants consistently disclosed increasing expected revenue figures for every new LTSA onsemi had signed with customers and assured investors that the LTSAs built “a more strategic relationship and partnership” with onsemi’s customers. Thus, Defendants told investors that, if onsemi’s customers “have . . . softness in their market and they have an LTSA, we’re going to get the call 6 months in advance.”

Notwithstanding Defendants’ assurances, on October 30, 2023, before the market opened, investors began to learn the truth about the purported benefits of onsemi’s LTSA strategy and the achievability of projected revenue from the company’s products subject to LTSAs, when onsemi announced its third quarter 2023 financial results. During the investor earnings call held that day, Defendants disclosed to investors that onsemi was “taking a very cautious approach” with its SiC products due to signs of a weakening demand in the company’s automotive business segment (which generates between 75% and 90% of onsemi’s SiC revenues), while also revealing that onsemi would miss its $1 billion 2023 SiC revenue target by approximately $200 million. Defendants claimed that the approximately 20% reduction in onsemi’s expected SiC revenue was solely attributable to one customer (identified by many analysts as Tesla, Inc.). Defendants added, however, that onsemi expects “greater sequential declines in industrial and other end markets” as well.

On this news, the price of onsemi common stock plummeted $18.18 per share, or nearly 22%, from a close of $83.52 per share on October 27, 2023, to close at $65.34 per share on October 30, 2023.

The Complaint alleges that, throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the company’s business and operations. Specifically, Defendants misrepresented and/or failed to disclose that: (1) revenues from billions of dollars in reported LTSAs were “committed” and “locked in,” and were effectively certain to be obtained by onsemi when, in fact, onsemi could and would abrogate the LTSAs at a customer’s request; (2) LTSA’s provided “predictable” and “sustainable” performance to drive onsemi’s growth, even in tough macroeconomic conditions, when, in fact, they would be modified or eliminated as conditions changed; and (3) Defendants had “good visibility” into customer demand when, in fact, demand could be reduced on short notice, even where LTSAs were in effect. As a result of the foregoing, Defendants’ positive statements about onsemi’s business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis.

WHAT CAN I DO?

onsemi investors may, no later than February 12, 2024, move the Court to serve as lead plaintiff for the class, through Kessler Topaz Meltzer & Check, LLP or other counsel, or may choose to do nothing and remain an absent class member. Kessler Topaz Meltzer & Check, LLP encourages onsemi investors who have suffered significant losses to contact the firm directly to acquire more information.

CLICK HERE TO SIGN UP FOR THE CASE

WHO CAN BE A LEAD PLAINTIFF?

A lead plaintiff is a representative party who acts on behalf of all class members in directing the litigation. The lead plaintiff is usually the investor or small group of investors who have the largest financial interest and who are also adequate and typical of the proposed class of investors. The lead plaintiff selects counsel to represent the lead plaintiff and the class and these attorneys, if approved by the court, are lead or class counsel. Your ability to share in any recovery is not affected by the decision of whether or not to serve as a lead plaintiff.

ABOUT KESSLER TOPAZ MELTZER & CHECK, LLP

Kessler Topaz Meltzer & Check, LLP prosecutes class actions in state and federal courts throughout the country and around the world. The firm has developed a global reputation for excellence and has recovered billions of dollars for victims of fraud and other corporate misconduct. All of our work is driven by a common goal: to protect investors, consumers, employees and others from fraud, abuse, misconduct and negligence by businesses and fiduciaries. For more information about Kessler Topaz Meltzer & Check, LLP please visit www.ktmc.com.

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