On Semiconductor has announced a nearly $7 billion all-stock acquisition of Synaptics, aimed at strengthening its position in the physical artificial intelligence sector. This deal is expected to increase On Semiconductor's total addressable market by $30 billion, bringing it to $243 billion by 2030.
Following the announcement, On Semiconductor's shares dropped approximately 6%, while Synaptics' shares rose about 13%. CEO Hassane El-Khoury emphasized that this acquisition will enhance connected compute capabilities and expand their software ecosystem, aligning with the growing demand for intelligent systems.
The deal is part of a broader trend in the technology sector, where companies like Qualcomm and Salesforce are also pursuing acquisitions to enhance their AI capabilities. The transaction is anticipated to close in mid-2027, with Synaptics shareholders receiving 1.350 shares of On Semiconductor's stock for each share they hold.
Additionally, On Semiconductor will appoint a Synaptics board member as part of the agreement