The unassuming semiconductor chip may be a ubiquitous presence in our daily lives, but the outlook for the broader sector is far from rosy. In a sign of just how bearish the market has turned on the sector, the ProShares UltraShort Semiconductors ETF , an inverse exchange-traded fund that bets against the sector, has returned nearly 60% this year. While demand for semiconductors soared during the pandemic, chip giants such as Micron , Intel , Qualcomm and Nvidia have, in recent weeks, issued a chorus of warnings about slowing demand, stoking fear that the beleaguered sector still has further to fall. But one stock stands out for its strong showing amid the bearishness. Arizona-based ON Semiconductor is the best performing stock on the PHLX Semiconductor Index (SOX) this year. The stock is down just 0.6% this year, outperforming the SOX, which has plunged around 24% in the same period. A brief summer rally saw the stock deliver a return of 15.1% in the second quarter, handily beating the broad-based S & P 500 , which declined 4.3% over the same period. ‘Record’ second quarter ON had a record second quarter, posting revenue of more than $2 billion for the first time. It delivered earnings per share of $1.02 for the quarter, compared to $0.42 in the same period a year ago. The company also grew its gross margin and free cash flow in the second quarter, while guiding for higher EPS in the third quarter. The company turned up on CNBC Pro’s screen of ” earnings season champs ” — companies whose gross margins rose at least 5 percentage points since the second quarter of 2021 and where analysts have revised their EPS growth estimates upwards by at least 5 percentage points post-earnings compared to the start of the earnings season. “Our leadership in the accelerating megatrends of vehicle electrification, ADAS [advanced driver assistance systems], energy infrastructure and factory automation have enabled us to extend long term supply agreements and increase demand visibility.,” Hassane El-Khoury, ON Semiconductor’s president and CEO, said in the company’s earnings release . Read more This tech stock is up nearly 20% over the past year. But one pro says it’s just getting started These outperforming stocks could be safe bets right now — and analysts give them serious upside ‘Get out of these distorted markets’: Mohamed El-Erian on where to invest right now Indeed, the company has long focused on supplying chips to the automotive sector — particularly the burgeoning electric vehicle industry. “ON has an auto and industrial tilt which are now two-thirds of sales, and these have some more structural underpinnings around electric vehicles and industrial automation,” Trent Masters, portfolio manager at Alphinity Investment Management, told CNBC “Street Signs Asia” on Monday. In addition to secular drivers, Masters noted that ON has benefited from “substantial” internal changes, such as manufacturing at scale, value adding facilities and realization of its portfolio value. He added that the company is building a “leading position” in silicon carbide semis, which are crucial for extending the range of EVs. “So, while the semis cycle can be violent those longer-term demand drivers are in place. It’s a wild ride but 14x [price-to-earnings ratio] for a business with a positive outlook is a reasonable place to be,” Masters said. The stock is well liked on Wall Street, with a 75% buy or overweight rating among the analysts covering it, according to FactSet. Analysts also have an average price target of $75.80 on the stock — giving it a potential upside of around 12% from its current price.