“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”
— Warren Buffett
An investment in ON Semiconductor Corp, now widely known as onsemi, illustrates how long-term equity returns can compound when a business participates in durable semiconductor demand and the market eventually rewards improved operating performance. Using the share-price change from September 25, 2006 through September 23, 2026, a $10,000 investment in NASD: ON would have grown to $118,658.84, assuming no dividends were paid or reinvested over the period.
The result highlights a central point about long-horizon stock investing: day-to-day volatility can be significant, but the longer-term outcome is driven primarily by business performance, earnings power, capital allocation, and valuation over time. In ON Semiconductor’s case, the return profile reflects a company that evolved from a more cyclical, lower-multiple chip manufacturer into a strategically stronger semiconductor supplier with broader exposure to industrial and automotive end markets.
ON Semiconductor 20-Year Return at a Glance
| Start date: | 09/25/2006 |
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| End date: | 09/23/2026 | ||||
| Start price/share: | $6.24 | ||||
| End price/share: | $74.10 | ||||
| Starting shares: | 1,602.56 | ||||
| Ending shares: | 1,602.56 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 1,087.50% | ||||
| Average annual return: | 13.16% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $118,658.84 | ||||
What Drove the Return?
The arithmetic is straightforward: ON Semiconductor shares rose from $6.24 to $74.10 over the measurement period, and the company did not contribute to total return through dividends. That means the full gain came from capital appreciation. In practical terms, the investment outcome depended entirely on share-price expansion, which in turn reflects the market’s view of the company’s earnings trajectory, competitive positioning, and end-market exposure.
Semiconductor stocks often move through pronounced cycles tied to inventory, industrial production, capital spending, consumer demand, and broader macroeconomic conditions. A 20-year holding period in a chip name therefore tends to include multiple expansions and contractions rather than a smooth compounding path. That matters because the headline return understates the degree of interim volatility an investor would likely have experienced along the way.
Why ON Semiconductor Has Been Closely Watched
ON Semiconductor has developed significant exposure to areas of the semiconductor market that investors often associate with secular growth, particularly automotive electrification, power management, industrial applications, sensors, and energy-efficient systems. These categories can command stronger strategic interest than lower-value, highly commoditized chip segments because they are tied to electrification, automation, and efficiency trends.
For long-term shareholders, the key question is not simply whether the stock rose, but why the market was willing to assign a much higher value over time. A stronger product mix, improved margin structure, disciplined portfolio choices, and increased relevance in automotive and industrial semiconductors can all contribute to that re-rating. When a company moves into applications with higher barriers to entry or longer product cycles, equity valuations can respond accordingly.
Key Takeaways From This 20-Year Investment
For investors evaluating long-term stock returns, this case offers several clear lessons:
- Compounding can be powerful even without dividends. ON Semiconductor’s result came entirely from price appreciation.
- Time horizon matters. A multi-decade holding period can capture business transformation that is not visible in shorter return windows.
- Cyclicality does not preclude strong long-term returns. Semiconductor stocks can be volatile while still producing substantial gains across a full cycle or several cycles.
- Entry price still matters. Starting valuation has a significant effect on long-run outcomes, particularly in sectors where sentiment can shift sharply.
How to Read the Numbers
The data above imply that 1,602.56 shares purchased for $10,000 in 2006 remained 1,602.56 shares in 2026 because no dividend reinvestment occurred. At an ending share price of $74.10, those shares would be worth $118,658.84. The total return of 1,087.50% translates to an average annual return of 13.16% over the holding period.
That annualized figure is especially important because it puts the result into a comparable framework. Total return percentages can look dramatic over long periods, but annualized returns provide a more useful basis for comparing one investment with another across different time spans.
[These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
One more piece of investment wisdom to leave you with:
“Value investing is at its core the marriage of a contrarian streak and a calculator.” — Seth Klarman
