By Sam Boughedda
ON Semiconductor Corporation (NASDAQ:ON) shares gained Tuesday on the back of the announcement of a long-term supply agreement with BMW (OTC:BMWYY). ON will supply its EliteSiC technology for the German premium car manufacturer's electric drivetrains for 400 V DC Bus.
The company's share price is currently trading around the $68.63 mark, up just over 1.5%. It hit a high of $79.60 earlier in the session.
The semiconductor firm said in its press release that its "latest EliteSiC 750 V M3 die is used in a full bridge power module delivering several hundred kWs of power."
"With maximum range being a primary consideration for purchasing an EV, onsemi's system approach for optimized performance across all of BMW's electric vehicles provides a key competitive advantage," commented Asif Jakwani, ON's senior vice president and general manager of Advanced Power Division and Power Solutions Group.
He added that his company is able to support the "rapidly increasing demand for BMW's premium EVs by continuously ramping all production steps of our robust, vertically integrated SiC supply chain."
Following the news, Rosenblatt Securities analysts said the firm believes the announcement is a positive for ON shares.
"We see onsemi's increasing SiC substrate manufacturing capacity along with its packaging technology as key market differentiators. We expect similar announcements from other EV vehicle OEMs in the near future," the analysts said in a note.