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Defining Semiconductor Demand In Q3

While most technology stocks have been shunned by the market, Cramer said his Mobile Internet Tsunami Index continues to perform well in the long-term. The Index, which tracks the performance of the stocks levered to the "smartphone revolution," is up 29% since its inception August 11, 2009 versus the 15% gain the S&P 500 posted during the same time period.

"But not every mobile Internet stock has been a winner," Cramer said. "I want to take a closer look at one of the laggards to see if there’s anything we should be worried about."

ON Semiconductor , for example, is a Phoenix-based company that makes power management chips for an array of electronic devices. Its stock is down 7% since the Mobile Internet Tsunami began tracking it last year. Cramer said the tech name reported a "solid quarter" after the closing bell Wednesday with earnings at 24 cents per share, which is a 2 cent beat on stronger-than-expected revenues. Yet ONNN shares traded lower Thursday because the company gave an in-line outlook for the third-quarter thanks to flat expected average selling prices for its chips. Company executives also revealed that inventory at distributors is up and expects that trend to continue in Q3. Cramer said this indicates that demand might not be as strong as once thought, which is worrisome because some analysts feared that double ordering of chips created an unrealistic and otherwise strong picture of semiconductor demand.

With the stock now trading less than a point off of its 52-week low, Cramer wanted to find out what's really going on with ON Semiconductor and invited CEO Keith Jackson onto Mad Money. To see their complete conversation, watch the video.

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