Onsemi, a semiconductor company specializing in intelligent power and sensing, has agreed to acquire Synaptics in a $7 billion deal. This acquisition aims to strengthen Onsemi’s position in the physical artificial intelligence (AI) and edge AI domains. The transaction, announced on Thursday, represents an approximately 19% premium over the volume-weighted average closing prices of both companies’ shares during the last 10 trading days.
The acquisition is expected to close in mid-2027, pending approval from Synaptics stockholders, necessary regulatory clearances, and other standard conditions. Upon completion, one member from Synaptics’ board is slated to join Onsemi’s board. This strategic move is designed to extend Onsemi’s capabilities beyond its current focus on power and sensing into more comprehensive intelligent systems.
Onsemi anticipates that integrating Synaptics’ Edge AI compute franchise and its portfolio of human-machine interface and wireless connectivity solutions will broaden its offerings. The company stated that this addition will enable it to move beyond its existing power and sensing capabilities into intelligent systems. This expansion is crucial as the demand for AI processing at the device level grows.
The combined entity is projected to expand Onsemi’s total addressable market (TAM) by $30 billion, reaching $243 billion by 2030. This growth is driven by the increasing need for integrated solutions that combine power, sensing, connected compute, and control in AI applications. The acquisition positions Onsemi to capture a larger share of the AI market, particularly in edge applications rather than solely data centers.
Hassane El-Khoury, president and CEO of Onsemi, stated that the shift towards physical AI necessitates the seamless integration of power, sense, connected compute, and control. He added that Synaptics’ inclusion helps Onsemi align with these four pillars, allowing it to pursue a significantly larger AI opportunity that extends into edge applications.
Rahul Patel, president and CEO of Synaptics, noted that the announcement marks an important step for Synaptics in accelerating its growth and leadership in edge AI and physical AI. He explained that Synaptics will combine its strengths in AI-native compute, connectivity, and human-machine interface with Onsemi’s leadership in intelligent power and sensing. This collaboration aims to offer customers integrated solutions and development platforms across every layer of the edge AI stack.
The long timeline for the transaction’s completion, mid-2027, suggests potential complexities related to regulatory approvals and integration planning. Investors will be watching how the companies manage these processes and whether the projected market expansion materializes as anticipated. The success of this acquisition hinges on the effective integration of technologies and market strategies to capitalize on the evolving physical AI landscape.
Further developments will likely include detailed integration plans and any updates on regulatory reviews. The market will also observe how the combined company’s product roadmap evolves to address the expanded total addressable market and compete with other players in the rapidly growing edge AI sector.