ON Semiconductor Corp. (NASDAQ:ON)

Total inventory levels exhibit a consistent upward trajectory over the five-year period from 2019 to 2023. The total value grew from 1,232,400 thousand US dollars in 2019 to 2,111,800 thousand US dollars by the end of 2023, representing an overall increase of approximately 71.4%. The rate of growth accelerated significantly in the latter two years, with the largest single-year increase occurring between 2022 and 2023.

Raw Materials Trends

Raw materials experienced the most aggressive growth relative to other inventory categories. While levels remained relatively flat between 2019 and 2020, a sharp escalation began in 2021. Between December 31, 2022, and December 31, 2023, raw materials nearly doubled, increasing from 236,800 thousand US dollars to 469,300 thousand US dollars. This suggests a strategic shift toward higher stockpiling of inputs or a response to supply chain volatility.

Work in Process (WIP) Analysis

Work in process constitutes the largest portion of the total inventory throughout the entire period. WIP levels rose steadily and linearly from 772,900 thousand US dollars in 2019 to 1,221,100 thousand US dollars in 2023. This consistent growth indicates an expansion in production volume and a higher volume of goods currently undergoing the manufacturing cycle.

Finished Goods Behavior

Finished goods displayed the most volatility and the slowest overall growth. After a decrease in 2020, the value rose to a peak of 429,000 thousand US dollars in 2022 before slightly declining to 421,400 thousand US dollars in 2023. The relative stability of finished goods compared to the surge in raw materials and WIP suggests that the increase in total inventory is driven by production inputs and mid-stage manufacturing rather than an accumulation of unsold end-products.

The structural composition of the inventory has shifted toward the beginning of the production cycle. The disproportionate increase in raw materials and work in process relative to finished goods indicates a significant expansion in operational capacity and a strategic increase in the inventory pipeline to support future demand.