Onsemi bets on physical AI with $7 billion Synaptics acquisition

Investing.com -- Chipmaker onsemi will acquire Synaptics in an all-stock transaction valued at approximately $7 billion, a deal aimed at expanding its presence in artificial intelligence-driven intelligent systems and strengthening its position in emerging Physical AI applications.

Under the terms of the agreement, Synaptics shareholders will receive 1.35 shares of onsemi common stock for each Synaptics share, representing a roughly 19% premium to the companies' combined 10-day volume-weighted average share prices, the company said. The transaction would give Synaptics shareholders about 12% ownership of the combined company on a fully diluted basis.

Shares of Synaptics rallied more than 10% in extended hours of trading.

The acquisition would add Synaptics' Edge AI computing, wireless connectivity and human-machine interface technologies to onsemi's portfolio of power management and sensing solutions. The combined company aims to offer integrated systems spanning power, sensing, connected computing and control, targeting applications such as autonomous vehicles, robotics and augmented and virtual reality.

onsemi Chief Executive Hassane El-Khoury said the deal would accelerate the company's evolution from a provider of power and sensing technologies into a broader intelligent systems platform, enabling it to capitalize on AI opportunities beyond data centers and into edge devices operating in the physical world.

The company said the acquisition is expected to increase its total addressable market by $30 billion to $243 billion by 2030. Synaptics' Astra platform, which combines AI processors, neural processing units, wireless connectivity technologies and open-source software tools, is expected to strengthen onsemi's edge AI capabilities.

onsemi expects the transaction to be accretive to non-GAAP earnings per share within 18 months of closing and generate approximately $200 million in annual synergies. The company said gross margins are expected to remain consistent with its long-term financial model.

The deal has been unanimously approved by both companies' boards and is expected to close in mid-2027, subject to Synaptics shareholder approval, regulatory clearances and customary closing conditions. Both companies reiterated their previously issued financial outlooks for their current quarters.

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