ON Semiconductor agreed to acquire Synaptics in an all-stock transaction valued at approximately $7 billion, the company's largest deal to date, as it looks to expand beyond power and sensing into AI-enabled devices and machines.
The chipmaker says the deal will expand its addressable market by $30 billion and push it deeper into physical AI applications
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ON Semiconductor agreed to acquire Synaptics in an all-stock transaction valued at approximately $7 billion, the company's largest deal to date, as it looks to expand beyond power and sensing into AI-enabled devices and machines.
Each Synaptics share will be exchanged for 1.350 shares of ON Semiconductor common stock, an exchange ratio that implies a roughly 19% premium when measured against the 10-day volume-weighted average closing prices of the two stocks. The deal was unanimously approved by the boards of both companies and is expected to close in mid-2027, pending Synaptics shareholder approval and regulatory clearance.
ON Semiconductor said the acquisition would expand its total addressable market by $30 billion to $243 billion by 2030. The company expects the deal to be accretive to non-GAAP earnings per share within 18 months of closing and to generate $200 million in annual synergies. Synaptics shareholders will hold approximately 12% of the combined company on a fully diluted basis, and one Synaptics board member will join ON Semiconductor's board.
Central to the rationale is the concept the companies describe as "physical AI" — intelligence that runs locally within hardware rather than being offloaded to remote servers. ON Semiconductor said Synaptics' Astra platform, which combines AI processors and neural processing units with wireless connectivity spanning Wi-Fi, Bluetooth, and GPS, would complement its existing strengths in automotive, industrial, and data center markets.
"As artificial intelligence moves beyond the cloud and into the physical world, including automotive and industrial, the next phase of innovation will depend on systems that can sense, decide, act and adapt in real time," ON Semiconductor President and CEO Hassane El-Khoury said in a statement. "The addition of Synaptics helps position onsemi at the intersection of these four pillars, enabling us to capture a significantly larger AI opportunity that extends beyond AI data center and into edge applications."
Synaptics President and CEO Rahul Patel said the all-stock structure would allow Synaptics shareholders to participate in the combined company's growth. "Together with onsemi, we will combine Synaptics' strengths in AI-native compute, connectivity, and human-machine interface with onsemi's leadership in intelligent power and sensing," Patel said in a statement.
After the announcement, ON Semiconductor shares lost between 6% and 10% in extended trading, while Synaptics shares climbed more than 10%.
Morgan Stanley $MS served as lead financial advisor to ON Semiconductor, with J.P. Morgan Securities also advising. Qatalyst Partners advised Synaptics.
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