ON
SYNA
No slowdown, according to ON
ON Semiconductor’s CEO Hassane El-Khoury basically told the market, “Relax, the AI train is still on the tracks.” He said demand tied to data centers, automotive, and industrial compute keeps climbing, and that the company isn’t seeing the kind of slowdown folks worry about when AI hype gets a little too bubbly.
The Synaptics deal is part of the pitch
The company also framed its pending Synaptics acquisition as a bigger-than-it-looks move. ON says the current core business has a roughly $213 billion total addressable market, and that the Synaptics piece adds another $30 billion-ish opportunity. If the deal closes, management thinks the combined TAM jumps past $243 billion — which is corporate-speak for “we want a bigger sandbox.”
AI, margins, and the long game
El-Khoury said ON expects AI data-center revenue to keep scaling fast, with the business growing more than 100% in 2026 and 2027. He also pointed to a 53% gross margin target as a milestone, not a finish line, suggesting newer products in AI, auto, and industrial could keep improving the mix.
Why investors care
The stock popped in premarket trading, and the message here is pretty straightforward: ON is betting that the AI buildout is still early, and that its chip portfolio — plus Synaptics if the deal closes — can ride that wave for years.
Big picture: this wasn’t just a cheerleading session. It was ON Semiconductor trying to convince investors that AI demand, margin expansion, and M&A are all part of the same story.