ON Semiconductor CEO Warns Power Density Is the Next Massive AI Bottleneck

ON Semiconductor Corp. (NASDAQ:ON) is expanding beyond its traditional auto and industrial markets, with J.P. Morgan seeing AI data centers and new power technologies as major long-term growth opportunities. J.P. Morgan analyst Harlan Sur said Thursday that the firm came away from ON Semiconductor’s Investor Day encouraged by the company’s broader technology portfolio and systems strategy. The company is using its leadership in power and sensing to target areas including AI data centers and physical AI. ON Semiconductor CEO Hassane El-Khoury said power density is emerging as the next major AI bottleneck as the challenge shifts from compute and memory to delivering more power in less space with greater efficiency and better thermal performance. AI Data Centers Emerge As Growth Engine Sur highlighted AI data centers as one of the clearest examples of ON Semiconductor’s expansion strategy. The company is targeting the entire "grid-to-rack-to-chip" power chain as AI systems demand more electricity in smaller spaces. Management expects AI data center revenue to grow at a compound annual rate of more than 50% from 2026 through 2030. Revenue from the business could rise from more than $500 million in 2026 to over $2.5 billion by 2030. ON Semiconductor also expects its content per AI rack to climb from about $15,000 today to roughly $115,000 by 2030. The company recently secured a new Vcore design win, with revenue expected to begin by the end of 2026. See More: Top Value Stocks J.P. Morgan Sees $10-$11 EPS Potential J.P. Morgan said ON Semiconductor’s updated financial targets could support earnings of about $10 to $11 per share by 2030. That compares with the current Wall Street estimate of $8 per share cited in the report. Management is targeting a 12% to 14% revenue compound annual growth rate from 2026 through 2030. It also sees gross margins reaching about 53%, operating margins of roughly 38% and free cash flow margins of 30% to 35%. The analyst also pointed to opportunities in automotive, industrial applications and physical AI. ON Semiconductor sees potential semiconductor content of up to about $900 per humanoid robot by 2030. The stock carries a Buy rating with an average price forecast of $106.16. Recent analyst moves include: Stifel: Hold (Lowers forecast to $75.00) (Sept. 17) Mizuho: Outperform (Lowers forecast to $95.00) (Sept. 17) Rosenblatt: Neutral (Maintains forecast to $85.00) (Sept. 17) ON Semiconductor Price Action ON Price Action: ON Semiconductor shares were up 2.34% at $68.16 at the time of publication on Thursday, according to Benzinga Pro data. Image via Shutterstock Read Also: Apple, Nvidia Eye Major Entry into AI Servers: Report