ON changes
Pick any two versions below to diff them.
- Price
- $73.70 → $76.94(+4.4%)
- Discount
- 14% to 36% → 10% to 33%(−4.0 pts)
- 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. For the gap to close, three things must be true. Revenue must keep growing from a year earlier after the 9% rise of Q2 2026, and the non-GAAP gross margin must reach the 40% to 42% range of the Q3 guidance. AI data center revenue must more than double in 2026, as management now expects. 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 Q3 report on November 2, 2026, gives the next test, the Synaptics shareholder vote on November 17, 2026, and foreign approvals follow, and the deal should close by mid-2027. If growth holds, the gap can close over the next four to six quarters. A new fall in car demand or a longer silicon carbide price war can delay it.
- Checkpoints
- Nov 2, 2026: Q3 2026 results: growth and gross margin. Pending. 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. 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. Feb 2027 (estimate): Q4 2026 results: AI data center revenue for 2026. Pending. Watch: AI data center revenue that more than doubled in 2026 and revenue that still grows from a year earlier 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
- 2026-10-19: 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. 2026-10-15: onsemi said that it will report its Q3 2026 results after the market closes on November 2, 2026. 2026-10-01: 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. 2026-09-16: 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. 2026-08-03: 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. 2026-06-25: 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. 2026-05-11: 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.