Chipmaker On Semiconductor, known as Onsemi, has agreed to buy fellow chip company Synaptics in a nearly $7 billion all-stock deal, according to CNBC reporter Samantha Subin.
The acquisition is part of Onsemi's push into what the industry calls "physical AI" — the use of artificial intelligence in real-world hardware and devices rather than purely in software and data centers.
On Semiconductor said the deal increases its total addressable market — essentially the full revenue opportunity it could chase — by $30 billion, bringing that figure to $243 billion by 2030, according to CNBC.
The transaction is expected to close in the middle of 2027.
Investors reacted sharply after hours. As reported by CNBC via Techmeme, Onsemi's stock (ticker ON) fell more than 9%, while Synaptics' stock (SYNA) climbed more than 11%. That split is a common pattern in acquisitions: shares of the company being bought often rise toward the offer price, while shares of the acquirer can dip as investors weigh the cost and risk of taking on a large purchase.
Why it matters: As AI moves beyond chatbots and into physical products like sensors, devices and connected hardware, established chipmakers are reshaping themselves to compete — and this deal is a sizable bet that the next wave of AI growth will be built into the physical world.