- Company name
- onsemi
- Sector
- Semiconductors
- About
- onsemi (ON Semiconductor) makes power and sensing chips. Its Power Solutions Group (PSG) sells silicon and silicon carbide power devices that convert and control electricity in cars, factories, solar and storage systems and AI data centers. Its Analog and Mixed-Signal Group (AMG) sells power management and control chips, and its Intelligent Sensing Group (ISG) sells image sensors, mainly for car cameras and industrial uses. Cars and industrial customers give most of its revenue, and AI data centers are its fastest-growing market. onsemi makes most of its chips in its own factories. Revenue was $1.72 billion in Q3 2026, and PSG gave 52% of it. In June 2026, onsemi agreed to buy Synaptics, which makes connectivity, edge AI and sensing chips. In November 2026, it agreed to buy Ferric, which makes integrated voltage regulators that supply power to AI processors.
- Thesis
- The market doubts that onsemi can return to steady growth. Its revenue fell in 2024 and 2025 because car makers sold fewer electric vehicles than planned and industrial customers used up their stock, and silicon carbide prices fell as Chinese suppliers added capacity. Investors also ask whether onsemi pays too much for Synaptics, a new market for the company, with new debt. The Q3 2026 report on November 2, 2026, met the first test: revenue rose 11% from a year earlier, and the non-GAAP gross margin rose to 41.2%. For the gap to close, three things must be true. Revenue must keep growing from a year earlier, and the non-GAAP gross margin must reach the 41.5% to 43.5% range of the Q4 guidance. AI data center revenue must more than double in 2026, as management expects, and keep growing toward the new 2030 target of more than $3 billion. The Synaptics purchase, now $5.7 billion in cash, must close by mid-2027 and add to non-GAAP earnings per share from the first quarter, as onsemi says it will. The Synaptics shareholder vote on November 17, 2026, is the next test, the Q4 report in about February 2027 follows, and the deal should close by mid-2027 after foreign approvals. If growth holds, the gap can close over the next three to five quarters. A new fall in car demand or a longer silicon carbide price war can delay it.
- Risks
- Car makers give a large part of revenue. If sales of electric and hybrid vehicles slow again, or car makers cut chip stock, demand for silicon carbide and other power chips can fall.
Chinese suppliers add silicon carbide capacity and cut prices. This can reduce onsemi's prices and gross margin, and it can leave its own factories underused.
The $5.7 billion cash purchase of Synaptics brings new markets and new debt, and the $600 million Ferric purchase uses more cash. The Synaptics deal still needs a Synaptics shareholder vote and foreign approvals, and the integration or the planned $200 million of cost synergies can take longer than planned.
AI data center revenue grows fast but is still a small part of sales. Competition from other power chip makers is strong, and customers can change suppliers between product generations.
- Balance sheet
- Cash: $4.4B
Debt: $4.5B
Net debt: $137M
Interest cover: 15×
Undrawn credit line: $1.5B
Debt due within 12 months: $805M
Last debt due: 2031
onsemi funds itself mostly with low-cost convertible notes and one issue of senior notes. On October 2, 2026, it had $4.16 billion of cash and $210 million of short-term investments. Its gross debt was $4.5 billion: $1.5 billion of 0.50% convertible notes due 2029, $1.5 billion of 0% convertible notes due 2031 issued in May 2026, $804.7 million of 0% convertible notes due 2027 and $700 million of 3.875% notes due 2028. The 0% notes due 2027 count as current debt. The $1.5 billion revolving credit facility, due 2028, had no borrowings. Interest cover is GAAP operating income divided by interest expense for the first nine months of 2026, and charges in Q1 2026 lowered it. In the first nine months of 2026, free cash flow was $1.13 billion and share buybacks were $697 million. The Synaptics deal changes this picture. On October 1, 2026, onsemi agreed to pay about $5.7 billion in cash with cash on hand and up to $2.45 billion of new secured term loans. On October 19, 2026, Morgan Stanley, JPMorgan Chase and other lenders signed an amended commitment letter for these loans. Synaptics also has its own senior notes due 2029 and convertible notes due 2031. onsemi also paid $52.2 million in cash for Silver Atena on October 5, 2026, and on November 2, 2026, it agreed to pay $600 million in cash for Ferric, plus up to $175 million later. So onsemi will move from net cash to net debt after the Synaptics deal closes, which it expects by mid-2027. On October 2, 2026, about $5.3 billion of buyback authority remained.
As of Oct 2, 2026.
- Checkpoints
- Nov 2, 2026: Q3 2026 results: growth and gross margin. Passed. Watch: Revenue within the $1.65 billion to $1.75 billion guidance and a non-GAAP gross margin of 40% or more pass; revenue below the guidance or a lower gross margin fails. Outcome: Revenue rose 11% to $1.72 billion, inside the guidance, and the non-GAAP gross margin rose to 41.2%.
Nov 17, 2026: Synaptics shareholder vote. Pending. Watch: Approval by Synaptics shareholders at $123 per share in cash passes; a rejection or a higher price after a competing offer fails.
Dec 2026 (estimate): Ferric deal closing. Pending. Watch: Closing by the end of 2026 for $600 million in cash passes; a delay into 2027 or a higher price fails.
Feb 2, 2027 (estimate): Q4 2026 results: AI data center revenue for 2026. Pending. Watch: AI data center revenue that more than doubled in 2026, revenue that still grows from a year earlier and a non-GAAP gross margin inside the 41.5% to 43.5% guidance pass; a fall in revenue or a missed AI data center target fails.
Q2 2027 (estimate): Synaptics deal closing. Pending. Watch: Closing by mid-2027 after the shareholder vote and foreign approvals, with a plan to repay the new term loans, passes; a delay past mid-2027 or a higher price fails.
- Recent events
- Nov 6, 2026: onsemi and the Czech Ministry of Industry and Trade agreed not to go ahead with the planned expansion of silicon carbide production at onsemi's Rožnov pod Radhoštěm site, which they announced in June 2024. onsemi said that the decision comes from changes in the silicon carbide market and in the economics of the project. The current silicon and silicon carbide operations at the site continue.
Nov 2, 2026: onsemi reported Q3 2026 results. Revenue rose 11% from a year earlier to $1.72 billion, and PSG revenue rose 21%. AI data center revenue rose 175% from a year earlier, and automotive revenue fell 1%. The non-GAAP gross margin was 41.2%, and non-GAAP EPS was $0.90, both above the middle of the guidance. Free cash flow was $489 million. For Q4, onsemi guided revenue of $1.715 billion to $1.815 billion and non-GAAP EPS of $0.95 to $1.07.
Nov 2, 2026: onsemi agreed to buy Ferric, which makes integrated voltage regulators for AI processors, for $600 million in cash, plus up to $175 million more if Ferric meets revenue targets through 2029. onsemi will pay with cash on hand and expects the deal to close by the end of 2026. It raised its 2030 AI data center revenue target by $500 million to more than $3 billion.
Oct 19, 2026: Synaptics filed its definitive proxy statement for the onsemi deal. Synaptics shareholders will vote on the deal at a special meeting on November 17, 2026.
Oct 15, 2026: onsemi said that it will report its Q3 2026 results after the market closes on November 2, 2026.
Oct 5, 2026: onsemi completed its purchase of Silver Atena, which adds systems engineering and application skills, for $52.2 million in cash.
Oct 1, 2026: onsemi and Synaptics changed their merger agreement after Synaptics received an unsolicited offer from another company. onsemi will now pay $123 per Synaptics share in cash, about $5.7 billion, in place of the June all-stock deal worth about $7 billion. onsemi now expects the deal to add to non-GAAP EPS at once. Morgan Stanley committed up to $2.45 billion of secured term loans. The US Federal Trade Commission approved the deal, and onsemi still expects it to close by mid-2027.
Sep 16, 2026: onsemi held an investor day. It said that it addresses a market of $213 billion by 2030 across cars, industry and AI data centers. It also launched an Embedded Power Platform for AI data centers, and Subaru agreed to evaluate it for future electric vehicles.
Aug 3, 2026: onsemi reported Q2 2026 results. Revenue rose 9% from a year earlier to $1.60 billion, and PSG revenue rose 19%. The non-GAAP gross margin was 39.3%, and non-GAAP EPS was $0.74. Free cash flow was $425 million, and share buybacks were $332 million. onsemi now expects AI data center revenue to more than double in 2026. For Q3, it guided revenue of $1.65 billion to $1.75 billion and non-GAAP EPS of $0.81 to $0.93.
Jun 25, 2026: onsemi agreed to buy Synaptics in an all-stock deal, 1.350 onsemi shares for each Synaptics share. Synaptics owners would have owned about 12% of the combined company. onsemi expected $200 million of annual cost synergies.
May 11, 2026: onsemi issued $1.5 billion of 0% convertible notes due May 1, 2031. It paid $351.6 million for hedges that reduce the dilution from the notes.