ON Semiconductor has agreed to acquire Synaptics in an all-stock deal valued at nearly $7 billion, the company announced this week. The deal is the largest in ON Semi's history and is aimed at strengthening its position in physical artificial intelligence technology.
The Arizona-based company said the acquisition would expand its total addressable market by $30 billion, bringing it to $243 billion by 2030. According to CNBC, the deal would add connected compute capabilities and broaden ON Semi's software and ecosystem reach.
"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," said ON Semiconductor CEO Hassane El-Khoury.
Under the terms of the deal, Synaptics shareholders will receive 1.350 shares of ON Semiconductor common stock for each share they hold. ON Semi will also add a Synaptics board member to its roster following the close of the transaction.
Markets reacted sharply to the announcement. Shares of ON Semi fell about 6% after the bell, while Synaptics shares rallied about 13%. The deal is expected to close in the middle of 2027.
ON Semiconductor is widely known as a major producer of silicon carbide and for its power and sensing solutions serving the automotive and electric vehicle industries. The Synaptics deal represents a significant push into intelligence systems beyond those core markets.
The acquisition comes during a period of heavy deal-making in the technology sector. Qualcomm this week acquired infrastructure startup Modular to strengthen its software capabilities. Earlier this month, Salesforce announced it would buy AI customer service platform Fin for about $3.6 billion. Technology companies are moving aggressively to build out their artificial intelligence capabilities through acquisitions rather than internal development alone.
ON Semi said the addition of Synaptics would strengthen its intelligence systems portfolio at a time when customers are increasingly looking for vendors that can deliver complete intelligent systems rather than individual components. The company positioned the deal as a response to that shift in customer demand.
El-Khoury is scheduled to appear on CNBC to discuss the deal on Friday morning.
