) announced its strategic partnership with privately-held CVRx Inc
to launch an implantable device (the Barostim neo™) for the
treatment of hypertension in Europe.
The two companies have been collaborating on the development of
the implantable device, which is expected to use three ON Semi
components. CVRx will also continue to use the latter's
manufacturing services, which came in particularly handy during the
The three ON Semi parts include two custom application-specific
integrated circuits (ASICs) and one digital control ASIC. All the
three parts are designed to minimize power consumption with a view
to extend the life of the device. Since energy efficiency is one of
the most important elements of an implantable medical device with
the ability to influence its pricing, this is an important area for
semiconductor companies offering power management solutions.
In fact, semiconductors are bringing a sea change in the medical
device market with their ability to increase longevity of the
devices, while reducing their manufacturing costs, shrinking their
sizes and expanding their uses. Databeans estimates that worldwide
semiconductor shipments for medical devices will go from 6 billion
units in 2011 to 10 billion by 2016, with sales going from $6
billion to $10 billion. However, average selling prices (ASPs) are
expected to be slightly down from around $0.68 to around $0.52.
The partnership will help On Semiconductor to gain market share
in Europe as well as in the medical segment. This will open new
avenues for the company.
Medical devices remain a focus area for On Semiconductor since
the company generated 20% of revenue from the segment in the first
quarter of 2012. The fact that this partnership expands its
presence in Europe is also encouraging (Europe accounted for 14% of
its revenue in the last quarter.
ON Semi reported revenue of $744.4 million in the last quarter,
down 3.1% sequentially, 14.5% year over year and in the middle of
management's guidance range of $720.0-760.0 million, or down 1-6%
sequentially. On a pro forma basis, the company reported a net
income of $51.1 million, or a 6.9% net income margin compared to
$52.4 million, or 6.8% in the previous quarter and $113.2 million
or 13.0% in the first quarter of 2012.
Currently, On Semiconductor has a Zacks Rank of #3, implying a
Hold rating in the short-term (1-3 months).
ON SEMICON CORP (ONNN): Free Stock Analysis
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