- A recent report by Gartner stated that revenue in the semiconductor market might decline in 2020
- The world is currently facing lockdowns due to outbreak of Coronavirus
ON Semiconductor Corporation had drawn down approximately $1.17 billion from its revolving credit facility in March 2020. The company said that has no immediate use of the funds, and it has made the withdrawal out of abundance of caution to have access to sufficient liquidity in an uncertain macroeconomic environment. With this withdrawal, the company has made full use of its $1.97 billion revolving line of credit.
“The withdrawal of approximately $1.17 billion from our revolving line of credit significantly enhances our liquidity position by adding to approximately $894 million of cash on our balance sheet at the end of the fourth quarter of 2019. With a history of prudent and aggressive cost management in the wake of challenging conditions, we are very confident that ON Semiconductor should be able to successfully weather the current macroeconomic challenges,” Bernard Gutmann, chief financial officer and executive vice president of ON Semiconductor had stated earlier.
Worldwide semiconductor revenue, as per a report by Gartner, had totalled $419.1 billion in 2019. These figures represent a downfall of 12 per cent from 2018, according to final results published by Gartner, Inc.
Revised revenue guidelines in March
“Based on preliminary assessment of the current business environment, we anticipate that our revenue for first quarter of 2020 will be in range of $1,275 million to $1,325 million, as compared to our earlier guidance of $1,355 million to $1,405 million, which we issued on February 3, 2020,” said Keith Jackson, president and CEO of ON Semiconductor.
Jackson added, “We saw soft order trends in China in the weeks following Lunar New Year holidays, but orders have since picked up, and we have not seen any significant cancellations of orders. Furthermore, our factories in China have returned to normal levels of operations after mandatory shutdown following the end of Lunar New Year holidays. The health and safety of our employees and their families are of paramount importance to us, and we are thankful for efforts of our employees in China, Korea, Hong Kong, and other countries affected by COVID-19.”
Public health outlook due to COVID-19 is uncertain and continues to evolve, and business impact of these conditions is difficult to forecast. The revised guidance is based on the information available to date. ON Semiconductor undertakes no obligation to update information in this release based on changes occurring after the date of this release.
