Semiconductor technology company Onsemi will acquire chipmaker Synaptics in an all-stock deal worth about $7 billion, the companies announced Wednesday. This combination of power semiconductors with edge computing will put the fusion at the heart of what the two companies refer to as “physical AI.”
Under the agreement, Synaptics shareholders will receive 1,350 shares for every share they own, a ratio that represents an average of approximately 19% premium closing prices weighted against the volume of both shares in the last 10 trading days, according to the joint merger press release. Synaptics investors will end up owning approximately 12% of the combined company on a fully diluted basis.
Edge AI and what it means for Onsemi
Onsemi has built its business around power management and sensor chips for several customers including automotive and data centers. Synaptics operates a diverse segment of semiconductors, from cutting-edge AI processors to wireless connectivity (Wi-Fi, Bluetooth, GPS) and human-machine interface technology.
Hassan Al-Khoury, CEO of Onsemi, framed the deal as focusing on the idea that AI applications are moving from cloud data centers to cars, factories and consumer devices. These real-world AI systems need chips that meet the requirements of a single, integrated platform.
In Unsemi advertisementAl-Khoury stated that the shift towards physical AI will require “power, sense, connected computing and control to work together seamlessly.” The acquisition will give Onsemi “instant connected computing capabilities” and expand its reach into computing ecosystems, he added.
Synaptics CEO Rahul Patel said the merger was a way to pair his company’s Astra AI computing platform with Onsemi’s semiconductor capabilities, providing customers with “integrated solutions and development platforms across every layer of the Edge AI stack.”
Timeline and financial details
Onsimi expects the merger deal to add an estimated $30 billion to the company’s total target market, raising the value of this market to $243 billion by 2030.
The transaction is expected to close by mid-2027, pending Synaptics shareholder approval and regulatory approval. One of Synaptics’ directors is also expected to join Onsemi’s board of directors following the completion of the transaction.
Morgan Stanley and JP Morgan Securities advised Onsemi on the transaction, with Skadden Arps serving as the company’s legal counsel. Catalyst Partners served as financial advisor to Synaptics, and Baker McKenzie provided legal advice, according to the press release.
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