Analog chipmaker Onsemi buys Synaptics in $7B all-stock deal to push into physical AI
Arizona-based chipmaker Onsemi today announced plans to acquire the internet of things and computer interface technology firm Synaptics Inc. in a deal valued at around $7 billion.
The deal will help Onsemi, officially known as Semiconductor Components Industries LLC, pursue its ambitions in “physical AI,” and bring artificial intelligence from massive cloud-based data centers into the physical world. Synaptics shareholders will receive 1.35 shares of Onsemi’s stock for each share they hold in what is described as an all-stock deal.
Onsemi’s stock fell more than 8% to $108.85 in extended trading in the wake of the news, but it’s still up 119% in the year-to-date, having benefited from soaring valuations across the semiconductor industry. It means Synaptics shareholders are getting a nice premium on the deal, as its stock rose 11% to $140 in late trading today.
Onsemi is a major manufacturer of analog silicon carbide chips that are used in the automotive and industrial markets. Among other things, its chips are used in power and sensing devices. The company also has a growing data center business, but until now it has not really benefitted from the AI boom. However, it believes it has an opportunity to drive growth in “edge AI,” which refers to AI models that perform their computations on local devices rather than processing workloads in the cloud.
