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On Semiconductor (ONNN - Analyst Report) recently launched two new power management integrated circuits (PMICs), namely NCP6924 and NCP6914, for better battery life in phones and other portable electronic items.

PMICs are used for managing power usage in their host devices such as smartphones, tablets, digital cameras, GPS systems and other portable devices. The main functions of PMIC in power management are DC-to-DC conversion, battery charging, selection of power source, voltage fluctuation management and other miscellaneous functions.

On Semi realizes the importance of efficient power management and it constantly launches new products in the power management segment. The recently-launched products are intended to enhance the performance of computing and game consoles.

Currently, smartphones, tablets and ultrabooks are the most-talked-about and hottest-selling electronic gadgets. The popularity behind smartphones and tablets are their slimmer and lighter build, multi-tasking capabilities such as easy availability of social networking sites (Facebook, Twitter), viewing videos, and Internet connectivity among others. Hence, the importance of power management in these devices rises as these applications can drain out the power in the devices very easily.

Further, reports from multiple market research companies suggest that smartphone units may reach 1.179 billion, growing at a CAGR of 21.0% to 2016, tablets 311 million units (39.0%) and ultrabooks 121 million units (59.0%).

Therefore, it is apparent that the smartphone, tablets, digital cameras and other portable device markets will see very strong growth, which will boost ON Semi’s power management business.

Of course, other IC makers such as Maxim Integrated Products (MXIM - Analyst Report), Linear Technology (LLTC - Analyst Report) and Texas Instruments (TXN - Analyst Report) also produce PMICs, so On Semiconductor will continue to see stiff competition going forward.

ON Semi reported revenues of $744.8 million in the second quarter of fiscal 2012, flat sequentially and down 17.8% year over year and in the middle of management’s guidance range of $720.0-760.0 million, or down 1-6% sequentially.

On a pro forma basis, the company reported a net income of $51.1 million, or a 6.9% net income margin compared with $52.4 million, or 6.8% in the previous quarter and $113.2 million or 13.0% in the first quarter of 2012.

Currently, On Semiconductor has a Zacks #3 Rank, implying a Hold rating in the short-term (1-3 months).

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