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ON Semiconductor Joins ‘Edge AI’ Market With $7 Billion Acquisition. The Stock Plummets.
By Nate Wolf
Updated June 26, 2026, 10:31 am EDT / Original June 25, 2026, 5:55 pm EDT
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ON Semiconductor will acquire Synaptics in an all-stock deal valued at approximately $7 billion to expand into edge AI.
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Onsemi stock dropped 8.3% after the $7 billion all-stock deal for Synaptics, whose shares rose 11%.
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The acquisition is projected to expand Onsemi’s market by up to $243 billion by 2030 and yield $200 million in annual synergies.
ON Semiconductor agreed to buy internet-of-things company Synaptics as it vies to bring artificial-intelligence from data centers into the physical world. Wall Street isn’t impressed.
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 shares dropped 19% to $95.67 in early trading Friday, putting the stock on pace for its largest single-day decline since October 30, 2023. Shares had surged 119% this year despite sluggish revenue growth because valuations across the semiconductor industry have soared.
Synaptics investors, meanwhile, secured a 19% premium on the volume weighted average closing prices of their shares over the last 10 trading days. However, the stock was up just 1% to $126.89 on Friday.
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Known for making analog chips for automotive and industrial markets, Onsemi has grown its sales to data centers 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.
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Moving into physical AI could expand Onsemi’s total addressable market by $30 billion to $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.
Analysts at BofA Securities said Onsemi stock could be more volatile in the near-term given the all-stock transaction, the stock’s strong recent performance, the “modest” earnings boost, and a perceived shift away from data-center opportunities. Still, the analysts like “the potential to gain an early position in the emerging edge AI/robotics market.”
BofA reiterated a Buy rating on Onsemi stock and a $138 price target in a research note.
Write to Nate Wolf at nate.wolf@barrons.comExternal link
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