ON Semiconductor Slips On $115M Acquisition To Expand AI Data Center Power Portfolio: Retail Turns Bullish

The company is betting on increasing power demands for artificial intelligence (AI) data centers.

Shares of On Semiconductor (Onsemi) dropped over 1% in early trading on Tuesday after the company announced its $115 million acquisition of Qorvo’s best-in-industry transistor technology business. In contrast, Qorvo's shares traded flat.

OmSemi said this strategic acquisition of Qoorvo’s Silicon Carbide (SiC) Junction Field Effect Transistors (JFET) business is aimed at expanding its power portfolio serving artificial intelligence (AI) data centers and emerging markets like EV battery disconnects. 

“The acquisition will complement onsemi’s extensive EliteSiC power portfolio and enable the company to address the need for high energy efficiency and power density in the AC-DC stage in power supply units for AI data centers,” Onsemi said in a statement citing that it expects the transaction to close in the first quarter of 2025.

The acquired JFETs are a type of electronic switch made from silicon carbide, a material known for its strength and ability to handle high temperatures.

According to the company, SiC JFETs offer the lowest on-resistance per chip area, which is less than half of any other technology in the market. 

The chips allow for typical off-the-shelf drivers, resulting in faster development, reduced energy consumption and lower system costs.

“As AI workloads become more complex and energy-intensive, the importance of reliable SiC JFETs that deliver high energy efficiency and are able to handle high voltages will continue to increase,” said Simon Keeton, Omsemi’s group president and general manager.

Despite the drop in share price, retail sentiment around Onsemi improved to ‘bullish’ (60/100) from ‘neutral’ a day ago as chatter also increased to ‘high’.

Baird reiterated its rating of ‘Neutral’ with a price target of $75 on the stock after the development.

Onsemi’s shares have fallen over 18% year-to-date, underperforming broader market indices and technology sector benchmarks. 

For updates and corrections, email newsroom[at]stocktwits[dot]com.<