ON Semiconductor Corp (ON) shares climbed in extended trading Tuesday after the chipmaker unveiled a substantial new capital allocation plan that signals confidence in its strategic direction.

The Buyback Details

ON Semiconductor's board has authorized a share repurchase program worth up to $6 billion over the next three years. The new buyback kicks off after the company's current authorization wraps up at the end of December.

This isn't ON Semi's first rodeo with buybacks. The company has already repurchased $2.1 billion of its common stock over the past three years under the existing program, demonstrating a consistent commitment to returning capital to shareholders.

Management's Take

"Our increased share repurchase program reflects the confidence we have in our long-term strategy," said Hassane El-Khoury, president and CEO of ON Semiconductor.

"As we continue to execute with discipline, we are investing in differentiated technologies across power and sensing that will define the next generation of intelligent, energy-efficient systems. These investments position onsemi to capture growth opportunities across our key markets of automotive, industrial and AI data center and deliver sustainable value to our shareholders."

The new authorization gives ON Semi flexibility in how it executes the buyback. The company may repurchase shares through open market purchases, privately negotiated transactions, or other methods, including trading plans. The authorization runs through December 31, 2028.

Market Reaction

ON Semiconductor shares were up 3.20% in after-hours trading Tuesday, reaching $47.02 at the time of publication.