ON Semiconductor (onsemi) has reached an agreement to acquire US-based semiconductor company Synaptics in an all-stock deal that values the latter at approximately $7bn.
The transaction marks onsemi’s largest acquisition to date as it aims to strengthen its position in the field of AI integrated into physical devices.
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Both onsemi and Synaptics are currently listed on Nasdaq.
Under the agreement’s terms, Synaptics shareholders will receive 1.35 shares of onsemi common stock for each Synaptics share they hold. This exchange ratio represents a premium of about 19% based on the 10-day volume-weighted average closing prices of both companies’ shares.
Once completed, Synaptics shareholders are expected to hold roughly 12% of the combined entity on a fully diluted basis.
Boards of both companies have unanimously approved the deal.
The proposed takeover is intended to accelerate onsemi’s involvement in what is described as physical AI, which is AI embedded directly in machines and devices, rather than just in cloud applications.
Synaptics president and CEO Rahul Patel said: “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 to offer customers integrated solutions and development platforms across every layer of the Edge AI stack, deepening customer engagement and expanding across a greater total addressable market.”
By acquiring Synaptics, onsemi expects to substantially increase its addressable market by $30bn, reaching an estimated $243bn by 2030.
The combined business will look to leverage Synaptics’ expertise in connected-computing platforms with onsemi’s established presence in the automotive, industrial, and power sectors.
Onsemi president and CEO Hassane El-Khoury said: “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.
“This shift towards Physical AI will require Power, Sense, Connected Compute and Control to work together seamlessly. 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 centre and into edge applications.
“This transaction would add immediate connected compute capabilities, expand our software and ecosystem reach and position onsemi to deliver greater value as customers increasingly seek intelligent systems.”
Transaction completion is scheduled for mid-2027, pending approval from Synaptics shareholders, regulatory authorities, and the satisfaction of other customary closing conditions.
One Synaptics board member is expected to join onsemi’s board as part of the agreement.
onsemi expects the deal to be accretive to non-GAAP earnings per share (EPS) within 18 months of closing, with $200m in estimated annual synergies.
The company also plans to maintain its existing capital return policy throughout the transaction process.
In November 2025, the European Commission gave approval for the Czech government to provide a €450m subsidy to onsemi for the creation of a silicon carbide (SiC) semiconductor manufacturing plant in Rožnov pod Radhoštěm.
