Onsemi to Buy Ferric for $600 Million in Cash, Raises AI Data Center Revenue Target
Onsemi agreed to buy Ferric, a developer of integrated voltage regulator technology for AI processors, for $600.0 million in cash plus up to $175.0 million more if Ferric hits revenue milestones, according to an 8-K the chipmaker filed Monday.
The deal is onsemi's bet that power delivery for the next generation of AI chips will move into the processor package itself. With it, the company raised its 2030 AI data center revenue target by $500 million to more than $3 billion and said it expects accelerated growth in its integrated voltage regulator business for several years after that.
How the deal is structured
A subsidiary of onsemi, Semiconductor Components Industries, will merge a newly formed unit into Ferric, leaving Ferric as a wholly owned subsidiary, the filing says. Ferric's eligible securityholders will share the $600.0 million at closing, subject to customary adjustments for cash, debt, transaction costs and working capital. They can also earn up to $175.0 million in additional cash tied to specified revenue milestones.
Onsemi will fund the purchase with cash on hand. The deal needs antitrust clearance under the Hart-Scott-Rodino Act and other customary conditions, and onsemi expects it to close in the fourth quarter of 2026.
Why onsemi wants Ferric
As processors draw more power, the industry is moving voltage regulation closer to the chip to cut losses and respond faster to swings in demand, onsemi said in its press release. Ferric's technology puts the power controller, transistors, inductors and capacitors into a single compact package, which the company said reduces board area by 50% to 70% compared with conventional discrete regulators. That lets customers devote more system power to AI computing.
Ferric holds more than 40 patents, and an estimated 50 Ferric employees, mostly in New York and Silicon Valley, are expected to join onsemi, the company said.
"The rapid growth of AI is reshaping the requirements for power delivery to increasingly capable and power-intensive processors," onsemi President and CEO Hassane El-Khoury said in the release. Ferric founder and CEO Noah Sturcken said joining onsemi gives the company "the scale, manufacturing capabilities and customer reach needed to accelerate adoption."
Financial impact
Onsemi said it expects no meaningful near-term financial impact from the transaction. Over time, it expects the deal to add to its long-term revenue growth, gross margin and EPS targets once the business reaches scale.
Barclays advised onsemi and Morrison & Foerster served as its legal counsel. UBS Investment Bank advised Ferric, with Cooley as legal counsel.
By the numbers
- Cash at closing: $600.0 million
- Earnout: up to $175.0 million, tied to revenue milestones
- 2030 AI data center revenue target: more than $3 billion, up $500 million
- Ferric patents: more than 40
- Expected close: fourth quarter of 2026
Sources
- ON Semiconductor Form 8-K on agreement to acquire Ferric, Inc., filed Nov. 2, 2026 (accession 0001193125-26-443681)
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