By Milana Vinn and Jaspreet Singh
June 25 (Reuters) – ON Semiconductor Corp said on Thursday it had agreed to acquire Synaptics in an all-stock deal valued at about $7 billion, its largest acquisition to date, as the chipmaker seeks to expand its presence in AI-enabled devices and so-called physical AI.
Under the terms of the agreement, Synaptics shareholders will receive 1.350 shares of Onsemi common stock for each Synaptics share. The exchange ratio represents a 19% premium based on the 10-day volume-weighted average closing prices of the two companies’ stocks.
The acquisition is aimed at accelerating growth in so-called physical AI, which refers to AI embedded in devices and machines. Synaptics’ connected-computing platform complements Onsemi’s strengths in automotive, power and industrial markets, Onsemi CEO Hassane El-Khoury told Reuters in an interview.
“What Synaptics brings to us is this acceleration with a world-class connected compute platform that is already in the markets [that we play in],” El-Khoury said.
“That combination is going to create a market leader in what is to be known as the physical AI realm,” he said.
Onsemi expects the deal to help increase the size of the markets it can target by $30 billion, to $243 billion by 2030.
Shares of Onsemi fell nearly 10% in extended trading, while those of Synaptics rose more than 10%.
The chipmaker also aims to capture growth from Synaptics’ human‑machine interface business and its broader technology and R&D in robotics and humanoid markets, El-Khoury said.
(Reporting by Milana Vinn in New York, Jaspreet Singh in Bengaluru; Editing by Anil D’Silva and Sanjeev Miglani)