Onsemi chases a $1 billion AI power startup with $3.5 billion of cash and a credit line
Onsemi is said to be near a $1 billion deal for Ferric, an AI power startup raised on roughly $42 million, unconfirmed and possibly padded with earnouts. The talks land a week after the $5.7 billion all-cash Synaptics rewrite and days before Q3 earnings that options say can move the stock 8.4%.
Vincent Jiang · 3 min read
A $1 billion rumor lands on a 6% day
Onsemi closed October 27 at $78.67, up 6.22%, worth $30.6 billion again 1. That evening The Information reported the chipmaker is negotiating to buy Ferric, a New York startup whose integrated voltage regulators sit beside AI processors and feed them steady power, for close to $1 billion 2. Onsemi has not confirmed the talks, and the price may include earnouts, payments that arrive only if performance targets are hit 2.
From $7 billion in stock to $5.7 billion in cash
The rumor lands on a balance sheet already committed. On June 25 onsemi−4.83% — onsemi, down 4.83 percent today signed an all-stock merger with Synaptics−0.22% — Synaptics, down 0.22 percent today valued near $7 billion; after an unnamed rival made an unsolicited bid, the October 1 rewrite pays $123 a share in cash, about $5.7 billion, funded from cash on hand plus fully committed Morgan Stanley+1.11% — Morgan Stanley, up 1.11 percent today debt 3. The FTC has cleared it, Synaptics shareholders have not yet voted, and closing is set for mid-2027 3.
Synaptics traded at $117.15 on October 23, 4.8% under the offer 4. By July, onsemi's debt had climbed to $4.48 billion from $3.0 billion in March, against $3.52 billion of cash 5. In the same quarter, Slate Path Capital cut its onsemi stake 83.7% and Sachem Head exited entirely, while JPMorgan added 10.1 million shares 6.
Two commitments near $6.7 billion stand against $3.5 billion of cash
- Estimate
Data
| Value | |
|---|---|
| Cash on hand (Jul 2026) | $3.52B |
| Synaptics (signed) | $5.7B |
| Ferric (reported) (estimate) | $1B |
What roughly 24 times the venture money buys
Ferric, founded in 2010, raised about $41.8 million across its life by one aggregator's tally, including a $32.1 million Series C in December 2024 7. The reported price is about 24 times that 8. The product is concrete: the Fe1767 Newport, a dual-sided integrated voltage regulator that delivers 145 amps in an 8.9 x 5.6mm package 1.2mm thin, mounted beside the processor it feeds 8.
The claims wrapped around it, up to 57% less voltage droop and a $10 billion market, are Ferric's own 7. The buyer carries the premium: 50.7 times trailing earnings against a five-year median of 19.3, on revenue still 26% below its 2023 level after ten down quarters 59. The market has already repriced one of onsemi's AI promises this year.
onsemi revenue is climbing again but sits 26% below its 2023 level
Data
| Revenue | |
|---|---|
| Q3 '23 | $2.18B |
| Q4 '23 | $2.02B |
| Q1 '24 | $1.86B |
| Q2 '24 | $1.74B |
| Q3 '24 | $1.76B |
| Q4 '24 | $1.72B |
| Q1 '25 | $1.45B |
| Q2 '25 | $1.47B |
| Q3 '25 | $1.55B |
| Q4 '25 | $1.53B |
| Q1 '26 | $1.51B |
| Q2 '26 | $1.6B |
The loan is signed; the cycle is a forecast
Chief executive Hassane El-Khoury's case: Synaptics is immediately accretive to non-GAAP earnings, and its cash flows fund the AI data-center push 3. The other path: the AI power cycle cools, the earnouts never pay, and the debt stays on a business that earned $259 million of operating income last quarter, with insiders selling $21.3 million and buying nothing for a year 59.
Third-quarter results land November 2, and options imply an 8.4% move 110. Watch the AI data-center revenue line, and any word on Ferric. The Morgan Stanley financing is committed; the AI power cycle is still a forecast.
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