ON Semiconductor has agreed to buy internet-of-things company Synaptics as it vies to bring artificial-intelligence from data centers into the physical world.
Synaptics shareholders will receive 1.35 shares of Onsemi stock for each Synaptics share in the all-stock deal, representing an enterprise value of around $7 billion.
Onsemi stock dropped 8.3% to $108.85 in after-hours trading Thursday. Shares have surged 119% this year despite sluggish revenue growth because valuations across the semiconductor industry have soared.
Synaptics investors, meanwhile, secured a nice premium for their shares. The stock was up 11% to $140 on Thursday evening.
Known for making analog chips for automotive and industrial markets, Onsemi has grown its sales to data centers and but hasn't been a central player in the AI boom. The company sees an opening in edge AI, however, which refers to computing done on local devices rather than in the cloud.
In particular, Synaptics' combination of processors, connectivity solutions, and software platform can help power physical AI applications, such as autonomous driving and robotics.
"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," said Onsemi CEO Hassane El-Khoury.
Moving into physical AI could expand Onsemi's total addressable market by between $30 billion and $243 billion by 2030, the company estimated. The acquisition is expected to boost adjusted earnings per share within 18 months of closing in mid-2027, with an expected $200 million in annual synergies.
Write to Nate Wolf at nate.wolf@barrons.com
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(END) Dow Jones Newswires
June 25, 2026 17:54 ET (21:54 GMT)
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