ON Semiconductor Corp (onsemi) has agreed to buy fellow semiconductor company Synaptics for about US$7 billion (A$10.2 billion) as it seeks to expand beyond power and sensing technologies into artificial intelligence-powered (AI) systems.
The United States-based company will offer 1.35 of its shares for each Synaptics share, representing a 19% premium to the volume-weighted average closing prices of onsemi and Synaptics over the last 10 trading days.
Onsemi said Synaptics’s AI compute platform, human-machine interface technology, and connectivity solutions would help it meet demand for increasingly capable AI solutions that can interact with the physical world.
The combined platform was intended to position onsemi at the centre of so-called physical AI, which refers to AI embedded in devices and machines, with the potential to expand onsemi’s total addressable market by $30 billion to $243 billion by 2030.
“By adding Synaptics’ differentiated Edge AI compute franchise and strong portfolio of human-machine interface and wireless connectivity solutions, onsemi is expected to extend its capabilities beyond power and sensing to intelligent systems, delivering greater value to a broad range of end markets,” the companies said in a joint statement.
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 center 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.”
ON Semiconductor Corp (NASDAQ: ON) shares fell $7.75 (6.53%) to $110.99 in after- hours trading, having earlier closed $3.00 (2.59%) higher at $118.74, capitalising the company at $46.53 billion.
Synaptics Inc (NASDAQ: SYNA) shares closed $12.38 ($9.86) higher at $138 in after-hours trading, having earlier closed $4.49 (3.45%) higher at $125.62, capitalising the company at $4.85 billion.
