What‘s the motive behind On Semiconductor‘s largest acquisition in history?

01 onsemi CEO Takes Opposite Stance to the Cypress Divestment Years Ago

Hassane El-Khoury, CEO of onsemi, has once again opted for a large-scale acquisition. Back in 2019, shortly after taking office as the new CEO of Cypress Semiconductor, he spearheaded the sale of the firm’s power and sensor business to German semiconductor manufacturer Infineon Technologies. The move bolstered Infineon’s footprint in computing and wireless connectivity design.

Fast forward to 2026: heading onsemi, a supplier of power, sensing and control chips, El-Khoury plans to acquire Synaptics in an all-stock transaction valued at approximately $7 billion, a deal designed to expand the company’s reach into computing and connectivity. Beyond computing and connectivity, artificial intelligence underpins virtually every facet of this transaction.

02 Targeting the Edge AI & Physical AI Markets

In a sense, edge AI lies at the heart of this transaction. onsemi stated in its press release: “By integrating Synaptics’ differentiated foundation in edge AI computing and robust product portfolio spanning human-machine interfaces and wireless connectivity solutions, we are poised to expand our footprint from power and sensing into intelligent systems.”

On the other hand, onsemi appears to place even greater emphasis on Physical AI. Referring to AI embedded in devices such as drones, robots and autonomous vehicles, Physical AI is an emerging technology that integrates AI models with hardware including sensors, motors and actuators, enabling devices to perceive surroundings, comprehend spatial relationships and execute real-world operations.

This context lays bare the narrative behind onsemi’s largest acquisition to date.

Headquartered in Scottsdale, Arizona, the United States, onsemi boasts a market valuation of $46.17 billion. It ranks as a leading supplier of power semiconductors and the world’s top vendor of automotive image sensors. Now, building on its strengths across automotive and industrial markets, onsemi aims to establish itself as a key player in power supplies for AI data centers.

While onsemi has already secured a solid foothold in energy grid solutions for data centers, Synaptics’ technology will enable the company to expand its footprint into the intelligent edge segment. It can deliver integrated system-level solutions for Physical AI use cases including augmented reality (AR)/virtual reality (VR) smart devices, autonomous driving and humanoid robots. To capture AI business opportunities spanning both AI data centers and edge applications, El-Khoury has defined four core technological pillars: real-time sensing, decision-making, actuation and adaptation.

He stated that combining Synaptics’ edge AI computing, wireless connectivity and human-machine interface (HMI) technologies with onsemi’s power management and sensing expertise will underpin these four pillars, unlocking the $300 billion Physical AI market. “The transition to Physical AI demands seamless coordination among power supply, sensing, connected computing and control.”

Many industry insiders concur that the acquisition is targeted at gaining a foothold in edge AI and Physical AI. Sanjeev Bode, an expert on corporate AI strategy, posted on LinkedIn: “This is a clue pointing to where AI heads next.” He wrote, “The next phase of AI will no longer revolve solely around large-scale AI models, massive GPUs and exorbitant data center costs. It will also encompass machines capable of sensing, comprehending, connecting and interacting with the physical world.”

The deal will also accelerate onsemi’s evolution from a power and sensing vendor to a system supplier catering to edge AI and Physical AI markets. El-Khoury commented: “By combining onsemi’s strengths in power, sensing and control with Synaptics’ edge AI computing, wireless connectivity and HMI technologies, we will emerge as a market leader in Physical AI.”

03 How Will Synaptics, a Pioneer in HMI, Integrate Its Technologies with onsemi?

Founded in 1986, Synaptics was established by two legendary semiconductor technologists, Federico Faggin and Carver Mead. Faggin rose to fame as the designer of the Intel 4004, the world’s first commercial microprocessor, and founded Zilog back in 1974. Mead, meanwhile, pioneered an innovative design methodology that split the increasingly complex chip development workflow into logic design, circuit design and layout design, decoupling these stages from manufacturing processes.

Synaptics set out to replicate biological functions on silicon wafers. This pursuit yielded its widely adopted HMI chips, covering notebook touchpads and touchscreen technologies, display drivers, human presence sensors, fingerprint scanners for smartphones, as well as far-field voice recognition solutions for automotive and smart home applications.

In recent years, Synaptics has evolved into a formidable player in edge AI by fusing its HMI expertise with AI-native computing and connectivity technologies. Its flagship offering is the Astra platform. Astra integrates dedicated AI processors and NPUs that enable multimodal intelligence, alongside wireless connectivity support for Wi-Fi, Bluetooth and GPS. It also delivers a fully open-source software stack that facilitates rapid deployment.

This acquisition marks the end of an era for the HMI pioneer. At the same time, it represents a brand-new starting point in edge AI for a company whose core strengths lie in power and sensing technologies. It remains to be seen how onsemi will integrate Synaptics’ edge AI and HMI technologies into its own silicon products. Another highlight lies in how Synaptics’ consumer-focused technologies will align with onsemi’s automotive and industrial product portfolios.

When EE Times, a U.S.-based electronics publication, reached out to Synaptics for comment, the company declined to respond citing regulatory constraints. Subject to regulatory approvals, the transaction is expected to close in mid-2027.