Onsemi agrees to buy Ferric for $600 million to strengthen AI chip power delivery

Onsemi has agreed to acquire Ferric, buying technology designed to deliver power closer to AI processors. The November 2, 2026 agreement calls for $600 million in cash at closing, plus up to $175 million tied to revenue milestones. Onsemi expects the acquisition to close by year-end, subject to customary conditions.

Moving power conversion closer to the processor

Ferric develops integrated voltage regulators, or IVRs: technology that converts and controls power close to a processor. Onsemi describes an industry shift toward placing voltage regulation nearer the chip as processors consume more power. The intended benefits are lower losses, more power delivered in less space, and a faster response when a processor’s power needs change rapidly.

IVRs take that approach into the processor package or substrate—the structure supporting the chip. Ferric’s architecture brings the power controller and components including inductors and capacitors together in one compact package. Instead of relying on a collection of separate voltage-regulation components, the design integrates those functions closer to where computing happens.

Onsemi says Ferric’s architecture uses 50–70% less board area than conventional designs built from separate voltage-regulation components. It also says the approach lets customers devote a greater share of system power to AI computing, improving tokens per watt: the amount of AI output produced for the power used. Those are company-stated benefits.

Ferric brings more than a decade of specialized engineering work in integrated voltage regulation and magnetics, backed by more than 40 patents. Onsemi’s stated rationale is to combine that expertise with its ability to turn technology into commercial products, its operating scale and its customer relationships.

$600 millionCash at closing

Onsemi will pay $600 million in cash when the transaction closes.

Up to $175 millionAdditional contingent cash

The additional payment depends on Ferric achieving revenue milestones.

An agreement replaces reported talks

The extra payment is tied to revenue milestones, so it is not guaranteed consideration at closing. Onsemi will fund the transaction with cash on hand. Approximately 50 Ferric employees, primarily based in New York and Silicon Valley, are expected to join the buyer. The announced agreement is not yet a completed acquisition.

The confirmed terms follow an earlier, higher reported figure. DIGITIMES reported that The Information, citing people familiar with the matter on October 27, had described acquisition discussions at close to $1 billion. That was a reported negotiating figure, not an agreed price. The new announcement establishes both a fixed closing payment and a separate, conditional payment.

A larger 2030 target, not an immediate boost

Alongside the deal, onsemi raised its 2030 AI data-center revenue target by $500 million to more than $3 billion. It expects accelerated growth in its integrated voltage regulator business for multiple years after that. The increase is a company target tied to the acquisition’s anticipated opportunity, rather than revenue already secured.

The financial timing is important. Onsemi expects no meaningful near-term financial impact from Ferric. At scale, however, it expects the acquisition to improve its long-term revenue growth and gross-margin profile. Its investment case therefore rests on commercial adoption over time, rather than an immediate contribution large enough to change near-term results.