# On Semiconductor Moat

Status: published. Policy: company-analysis-1.

Onsemi has proprietary technology, longstanding customer relationships and binding supply commitments, but the passages do not establish durable competitive superiority or substantial switching costs. Contract renegotiations and declining remaining commitments weaken the case for customer dependency, although they do not prove customer losses. Pricing power is unproven: disclosed margin recovery reflects demand, mix and fewer charges rather than demonstrated price increases. This is insufficient evidence of a moat, rather than established competitive weakness.

## intangible_assets

Patents, trade secrets and technical know-how are existing assets that could support differentiation; their ability to exclude competitors or sustain superior customer economics is not demonstrated.

Durability: Unestablished. The issuer considers its protection adequate, but the passages provide no technology-specific protection periods or demonstrated persistence of superiority.

Risks: Competing technology could erode differentiation. New technology introductions and customer sampling demonstrate development activity, not durable commercial leadership.

Invalidation: The differentiation thesis would be undermined by disclosed product substitution, loss of important IP protection or repeated commercial failures attributable to inferior technical performance.

Competitors: Not established
## switching_costs

Longstanding customer relationships, multi-year commitments and non-cancelable capacity payments provide some contractual attachment. They do not establish substantial technical or economic switching costs.

Durability: Limited to disclosed contractual protections; persistence beyond those commitments is unproven. Remaining LTSA obligations declined from $16.5 billion at year-end 2023 to $11.9 billion in 2024, $7.1 billion in 2025 and $6.5 billion in April 2026.

Risks: Agreements were modified in 2024 and 2025, and standard orders allow cancellation. The decline in remaining obligations includes contractual fulfillment and cannot be treated entirely as cancellations or lost customers.

Invalidation: The attachment thesis would be undermined by evidence of customers replacing onsemi without meaningful qualification costs, repeat commitments failing to replenish fulfilled contracts, or capacity-payment protections being waived without compensation.

Competitors: Not established
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