ON Semiconductor Corporation (ON)

Inventory turnover

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Cost of revenue (ttm)	US$ in thousands	3,866,200	3,999,000	4,186,600	4,336,400	4,369,500	4,376,400	4,360,600	4,307,500	4,249,000	4,179,800	4,066,800	4,048,700	4,025,500	3,960,300	3,815,100	3,624,500	3,539,200	3,506,600	3,537,100	3,546,600
Inventory	US$ in thousands	2,242,000	2,242,800	2,224,600	2,147,100	2,111,800	2,084,800	1,964,400	1,814,900	1,616,800	1,575,400	1,563,200	1,496,000	1,379,500	1,327,600	1,309,300	1,295,500	1,251,400	1,281,200	1,285,400	1,251,900
Inventory turnover		1.72	1.78	1.88	2.02	2.07	2.10	2.22	2.37	2.63	2.65	2.60	2.71	2.92	2.98	2.91	2.80	2.83	2.74	2.75	2.83

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $3,866,200K ÷ $2,242,000K
= 1.72

The inventory turnover ratio of ON Semiconductor Corporation has been gradually decreasing over the period from March 31, 2020, to December 31, 2024. The ratio declined from 2.83 in March 2020 to 1.72 in December 2024, indicating a decreasing efficiency in managing inventory levels and turning over inventory into sales during the specified period. This downward trend suggests potential issues such as overstocking, slow-moving inventory, or ineffective inventory management strategies. It may also signify challenges in forecasting demand accurately or adapting to changing market conditions. ON Semiconductor Corporation could benefit from reassessing its inventory management practices to improve efficiency and optimize working capital utilization.