Semiconductor Buybacks: Winners and Losers

ON Semiconductor’s 6 Billion Dollar BuybackIn today’s episode we are breaking down ON Semiconductor’s new 6 billion dollar share repurchase plan. The buyback will run from 2026 to 2028 and replaces the current program once it expires. The key takeaway for traders is simple: management is signalling confidence in long term cash generation and is prioritising shareholder returns through aggressive buybacks.That kind of move does not just affect $ON. It reshapes how investors think about other chip names, especially around capital returns versus heavy spending. Here is a quick look at likely winners and losers.WINNERSCategory 1 – Buyback and cash return chipmakersReason: When one major name commits to a huge multi-year buyback, it can pull investor attention toward other semiconductors that also return a lot of cash to shareholders, not just chase growth.Names to watch:$ON – Direct beneficiary from reduced share count and stronger earnings per share support on dips.$TXN – Texas Instruments already has a strong track record of buybacks and dividends, so the onsemi news reinforces the appeal of this cash machine style semiconductor story.Category 2 – Auto and power focused chip playersReason: onsemi tied its confidence to demand in automotive and industrial power markets. That narrative can lift sentiment for peers exposed to the same themes.Names to watch:$NXPI – NXP is a major auto chip supplier and can benefit if investors lean into the broader vehicle and power electronics story.$AVGO – Broadcom has meaningful exposure to networking and infrastructure chips and is already known for strong capital returns, so it fits the “quality cash generator” basket traders may favour.LOSERSCategory 1 – Chip equipment suppliers tied to new fab spendingReason: Every dollar used for buybacks is a dollar not used for extra capacity expansion. If more chipmakers prioritise shareholder returns, the long term upside for equipment demand can look a bit less explosive.Names to watch carefully:$AMAT – Applied Materials is closely linked to wafer fab equipment cycles and may see less benefit if power chip makers keep capex disciplined.$LRCX – Lam Research faces similar dynamics if incremental tool orders from these customers grow more slowly than the most bullish scenarios.Category 2 – Heavy investment chipmakers without a clear capital return storyReason: Once a peer announces a headline grabbing 6 billion dollar program, investors may start asking why others in the sector are not committing to comparable buybacks or dividends.Names to watch carefully:$INTC – Intel is in investment mode, pouring cash into new foundry capacity rather than large scale buybacks, which can look less attractive to capital return focused traders in the short term.$MU – Micron remains highly cyclical and capex driven, so its profile is still more about riding memory cycles than delivering steady shareholder yield.For traders, the simple framework is this: look for relative strength in cash generative semiconductor names with clear buyback policies on pullbacks, and be more selective around stories that still need big spending or perfect cycles to justify their valuations.#StockMarket #Trading #Investing #DayTrading #SwingTrading #USStocks #Semiconductors #TechStocks #ShareBuybacks #OptionsTrading #ON #ChipStocks

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