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ON Semiconductor

catalyst in 8dNo base rate yet — ON has 0 graded prints on the record, and the bar is 3.Website
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$1.6B
as of Jul 2026
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Researched · Fresh
17 days ago

A real cyclical bottom (Q1'26 inflected — rev +5%, GM back to 38.5%, AI-datacenter power doubling) that management just clouded with a $7B all-stock Synaptics deal — the recovery is genuine, but the price now embeds both a 113% YTD melt-up and a dilutive bet on consumer-edge AI that investors don't yet trust. WATCHING into the Q2 print and Synaptics vote.

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7 mentions across our dossiers
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ON Semiconductor
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“A short seller would now say: a rival thought Synaptics was worth more than onsemi's June offer at September prices, and onsemi paid up in cash rather than walk away with a $235M fee.”Synaptics · BOTH · from ON Semiconductor’s dossier
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Price

Weekly closes

72.25USD+0.3%hardware -4.1%ON · 111 weekly closes to 2026-10-23

Who is buying

Insiders sold, last 90 daysSEC Form 4 · newest 1 Oct 2026
1 filing · 15,578 shares
Insiders bought, last 90 daysSEC Form 4 · newest 2 Oct 2026
1 filing · 126 shares
Shares sold shortFINRA · settled 30 Sept 2026
30,002,949 shares
Days to unwind the shortFINRA · settled 30 Sept 2026
2.44
see the whole series
Financials

The reported figures

ON Semiconductor’s figures as the company reported them in its filings. Quarters are calendar quarters, so a company whose year ends in January shows each fiscal quarter under the calendar quarter it falls in. An empty slot is a quarter we hold no figure for.

Revenue · quarterlyQ3 ’23 – Q2 ’26
$1.6B+9.2% vs Q2 ’25

Q2 ’26 · as of Jul 2026

Revenue Q3 ’23: $2.2B, as of Sep 2023Revenue Q4 ’23: $2.0B, as of Dec 2023Revenue Q1 ’24: $1.9B, as of Mar 2024Revenue Q2 ’24: $1.7B, as of Jun 2024Revenue Q3 ’24: $1.8B, as of Sep 2024Revenue Q4 ’24: $1.7B, as of Dec 2024Revenue Q1 ’25: $1.4B, as of Apr 2025Revenue Q2 ’25: $1.5B, as of Jul 2025Revenue Q3 ’25: $1.6B, as of Oct 2025Revenue Q4 ’25: $1.5B, as of Dec 2025Revenue Q1 ’26: $1.5B, as of Apr 2026Revenue Q2 ’26: $1.6B, as of Jul 2026
Operating margin · quarterlyQ3 ’23 – Q2 ’26
16.1%+3.0 pts vs Q2 ’25

Q2 ’26 · as of Jul 2026

Operating margin Q3 ’23: 31.5%, as of Sep 2023Operating margin Q4 ’23: 30.3%, as of Dec 2023Operating margin Q1 ’24: 28.2%, as of Mar 2024Operating margin Q2 ’24: 22.4%, as of Jun 2024Operating margin Q3 ’24: 25.3%, as of Sep 2024Operating margin Q4 ’24: 23.7%, as of Dec 2024Operating margin Q1 ’25: -39.7%, as of Apr 2025Operating margin Q2 ’25: 13.2%, as of Jul 2025Operating margin Q3 ’25: 17.0%, as of Oct 2025Operating margin Q4 ’25: 13.1%, as of Dec 2025Operating margin Q1 ’26: -3.5%, as of Apr 2026Operating margin Q2 ’26: 16.1%, as of Jul 2026
Free cash flow · quarterlyQ3 ’23 – Q2 ’26
$425M

Q2 ’26 · as of Jul 2026

Free cash flow Q3 ’23: $134M, as of Sep 2023Free cash flow Q4 ’23: $257M, as of Dec 2023Free cash flow Q1 ’24: $265M, as of Mar 2024Free cash flow Q2 ’24: $221M, as of Jun 2024Free cash flow Q3 ’24: $304M, as of Sep 2024Free cash flow Q4 ’24: $422M, as of Dec 2024Free cash flow Q1 ’25: $455M, as of Apr 2025Free cash flow Q2 ’25: $106M, as of Jul 2025Free cash flow Q3 ’25: $372M, as of Oct 2025Free cash flow Q4 ’25: $485M, as of Dec 2025Free cash flow Q1 ’26: $217M, as of Apr 2026Free cash flow Q2 ’26: $425M, as of Jul 2026

Operating cash flow minus capital spending.

Cash · quarterlyQ3 ’23 – Q2 ’26
$3.5Bdebt $4.5B

Q2 ’26 · as of Jul 2026

Cash Q3 ’23: $2.7B, as of Sep 2023Cash Q4 ’23: $2.5B, as of Dec 2023Cash Q1 ’24: $2.6B, as of Mar 2024Cash Q2 ’24: $2.2B, as of Jun 2024Cash Q3 ’24: $2.5B, as of Sep 2024Cash Q4 ’24: $2.7B, as of Dec 2024Cash Q1 ’25: $2.8B, as of Apr 2025Cash Q2 ’25: $2.5B, as of Jul 2025Cash Q3 ’25: $2.5B, as of Oct 2025Cash Q4 ’25: $2.1B, as of Dec 2025Cash Q1 ’26: $2.0B, as of Apr 2026Cash Q2 ’26: $3.5B, as of Jul 2026Debt Q3 ’23: $3.5B, as of Sep 2023Debt Q4 ’23: $3.4B, as of Dec 2023Debt Q1 ’24: $3.4B, as of Mar 2024Debt Q2 ’24: $3.4B, as of Jun 2024Debt Q3 ’24: $3.4B, as of Sep 2024Debt Q4 ’24: $3.3B, as of Dec 2024Debt Q1 ’25: $3.4B, as of Apr 2025Debt Q2 ’25: $3.4B, as of Jul 2025Debt Q3 ’25: $3.4B, as of Oct 2025Debt Q4 ’25: $3.0B, as of Dec 2025Debt Q1 ’26: $3.0B, as of Apr 2026Debt Q2 ’26: $4.5B, as of Jul 2026

CashDebt

Shares outstanding · quarterlyQ3 ’23 – Q2 ’26
389.3M-9.6% since Q3 ’23

Q2 ’26 · as of Jul 2026

Shares outstanding Q3 ’23: 430.7M, as of Sep 2023Shares outstanding Q4 ’23: 427.3M, as of Dec 2023Shares outstanding Q1 ’24: 430.2M, as of Mar 2024Shares outstanding Q2 ’24: 428.4M, as of Jun 2024Shares outstanding Q3 ’24: 425.8M, as of Sep 2024Shares outstanding Q4 ’24: 421.4M, as of Dec 2024Shares outstanding Q1 ’25: 417.9M, as of Apr 2025Shares outstanding Q2 ’25: 409.0M, as of Jul 2025Shares outstanding Q3 ’25: 402.4M, as of Oct 2025Shares outstanding Q4 ’25: 394.0M, as of Dec 2025Shares outstanding Q1 ’26: 391.9M, as of Apr 2026Shares outstanding Q2 ’26: 389.3M, as of Jul 2026

A rising count is dilution: each existing share owns less of the company.

Latest filing: sec.gov

The record

What happened

What happened
DateTypeWhat happenedSource
2026-10-08editorial noteMargin figure revised: 15.1% → 38.4%Margin moved from 15.1% (deep-dive-2026-06-30.md) to 38.4% (deep-dive-2026-10-08.md).dossier
2026-10-08editorial noteRevenue figure revised: 11% → $1,603.5MRevenue moved from 11% (deep-dive-2026-06-30.md) to $1,603.5M (deep-dive-2026-10-08.md).dossier
2026-10-08editorial noteVerdict changed: A real cyclical bottom (Q1'26 inflected — rev +5%, GM back to 38.5%, AI-datacenter power doubling) that management just clouded with a $7B all-stock Synaptics deal — the recovery is …Before (deep-dive-2026-06-30.md): A real cyclical bottom (Q1'26 inflected — rev +5%, GM back to 38.5%, AI-datacenter power doubling) that management just clouded with a $7B all-stock Synaptics deal — the recovery is genuine, but the price now embeds both a 113% YTD melt-up and a dilutive bet on consumer-edge AI that investors don't yet trust. WATCHING into the Q2 print and Synaptics vote. After (deep-dive-2026-10-08.md): The Synaptics deal changed shape. In June onsemi offered 1.350 of its own shares per Synaptics share (about $7B, worth $156.25 a share on signing day). On 1 Oct, after a rival bidder called Party A made a higher unsolicited offer, onsemi switched to $123 cash per share (about $5.7B), funded with cash on hand plus a $2.45B Morgan Stanley term loan. The ~12% dilution in the June dossier's bear case is gone, swapped for debt. Holders of ON now pay a lower headline price but carry the leverage and a deal that had to be won in a contest. Closing is still guided to mid-2027. Still WATCHING.dossier
2026-10-01contract8-K: onsemi amended merger agreement to acquire Synaptics at $123 per share cashOn 1 Oct 2026 onsemi, Synaptics and Merger Sub entered an Amended and Restated Agreement and Plan of Merger at $123 per share in cash; Morgan Stanley commitment letter for up to $2,450,000,000 term loan.agent:company-events · SEC EDGAR 8-K
Research

The ON Semiconductor dossier

The verdict

The Synaptics deal changed shape. In June onsemi offered 1.350 of its own shares per Synaptics share (about $7B, worth $156.25 a share on signing day). On 1 Oct, after a rival bidder called Party A made a higher unsolicited offer, onsemi switched to $123 cash per share (about $5.7B), funded with cash on hand plus a $2.45B Morgan Stanley term loan. The ~12% dilution in the June dossier's bear case is gone, swapped for debt. Holders of ON now pay a lower headline price but carry the leverage and a deal that had to be won in a contest. Closing is still guided to mid-2027. Still WATCHING.

Primary sources

SEC filings

Source documents — open to read in full

Refresh delta (since 2026-06-30)

What changed

The open question, answered: June terms vs October terms, side by side.

TermOriginal (signed 2026-06-25)Amended and restated (signed 2026-10-01)
AgreementAgreement and Plan of Reorganization [SEC: 8-K, 2026-06-25, 0001140361-26-026395]Amended and Restated Agreement and Plan of Merger, replaces the June agreement in full [SEC: 8-K, 2026-10-01, 0001140361-26-038294]
What a Synaptics holder gets1.350 onsemi shares per Synaptics share, fixed ratio, no collar [SEC: 8-K, 2026-06-25]$123.00 cash per share, no interest [SEC: 8-K, 2026-10-01]
Headline value~$7B Enterprise valueWhat it would cost to buy the whole company: its market value plus its debt, minus the cash you would get with it. Often very different from market cap.; ~19% premium to 10-day VWAPs [SEC: 8-K Ex-99.1, 2026-06-25]~$5.7B aggregate value, "as compared to approximately $7 billion" [SEC: 8-K Ex-99.1, 2026-10-01]
Per-share value at signing$156.25 (1.350 × ON close $115.74 on 2026-06-24) [SEC: S-4, 2026-08-21, 0001140361-26-033970]$123.00 fixed
Synaptics ownership of onsemi~12% pro forma, fully diluted [SEC: 8-K Ex-99.1, 2026-06-25]None. Synaptics holders are cashed out
Tax treatmentIntended Section 368 reorganization (tax-free)"No longer structured as a reorganization" (taxable to holders) [SEC: 8-K, 2026-10-01]
Appraisal rightsNone available [SEC: 8-K, 2026-06-25]Available under DGCL §262 [SEC: 8-K, 2026-10-01]
Board seatOne Synaptics director joins onsemi's boardRequirement removed
Unvested Synaptics awardsRolled into ON awards × 1.350Rolled into ON awards × a floating "Conversion Ratio" = $123 ÷ ON 5-day VWAP ending 3 trading days before close
FinancingNone needed (stock)Cash on hand plus up to $2.45B senior secured term loan from Morgan Stanley Senior Funding. Financing is not a closing condition [SEC: 8-K, 2026-10-01; Ex-10.1]
RegistrationS-4 (File 333-298477) filed 2026-08-21S-4 withdrawn under Rule 477; no shares were sold [SEC: RW, 2026-10-02, 0001140361-26-038326]
Termination fee, Synaptics to onsemi$235M$235M, unchanged in the A&R text [SEC: 8-K Ex-2.1, 2026-10-01]
Regulatory reverse fee, onsemi to Synaptics$320M$320M, unchanged [SEC: 8-K Ex-2.1, 2026-10-01]
End Date2027-06-25, up to three 3-month extensions2027-06-25, same extension mechanism [SEC: 8-K Ex-2.1, 2026-10-01]
Expected closemid-2027"still expected to close by mid-2027"

What changed, in one paragraph. onsemi stopped paying in its own stock and started paying cash. A June Synaptics holder was promised a fixed number of ON shares. ON then fell from $115.74 (2026-06-24) to $76.87 (2026-09-30). At that price the original deal was worth about $103.77 a Synaptics share. The new $123 cash is about 18.5% more than the old deal's value the day before the amendment, and 21.3% less than the old deal's value on signing day. It is a 21.3% premium to SYNA's 2026-09-30 close of $101.40. onsemi now says the deal is immediately accretive to non-GAAP EPS on closing. In June it said accretive within 18 months [SEC: 8-K Ex-99.1, 2026-06-25 and 2026-10-01]. It also names synergies beyond the original $200M a year, from revenue synergies and bringing part of Synaptics' production in-house, but gives no number for them [SEC: 8-K Ex-99.1, 2026-10-01].

Closing conditions. Four conditions were deleted because they only made sense for a stock deal: (1) the S-4 being effective, (2) Nasdaq listing of new ON shares, (3) no material adverse effect at onsemi, (4) tax opinions [SEC: 8-K, 2026-10-01]. What remains: the Synaptics stockholder vote (majority of shares outstanding), remaining antitrust and foreign-investment approvals, no blocking order, accuracy of reps, covenant compliance, and no material adverse effect at Synaptics [SEC: 8-K, 2026-06-25; 2026-10-01]. US antitrust is already done. HSR filings went in 2026-07-17 and the FTC granted early termination on 2026-08-12 [SEC: 8-K, 2026-08-13, 0001140361-26-032594]. Other jurisdictions are still reviewing. The filings do not name them [SEC: 8-K Ex-99.1, 2026-10-01].

Timing mechanics. Synaptics must file a preliminary proxy within 10 days of 2026-10-01 and hold the vote within 30 days of learning the SEC will not review it or has no further comments [SEC: 8-K, 2026-10-01]. As of 2026-10-08 no PREM14A from Synaptics appears on EDGAR. Its latest filing is a DEFA14A on 2026-10-02 [SEC: submissions CIK0000817720, fetched 2026-10-08]. So the vote could come around year-end. Closing still waits on the non-US approvals, which is why mid-2027 did not move.

What the filings say about Party A. The S-4's background section (filed before the contest) tells the early story [SEC: S-4, 2026-08-21]:

  • Party A is a strategic bidder with publicly listed stock. Its CEO first raised a takeover with Synaptics' CEO on 2026-02-12, after meetings in November 2025 and January 2026. The two signed an NDA on 2026-02-21 with no standstill, which left Party A free to come back later.
  • 2026-03-13: $95 a share, 35% cash and 65% Party A stock. 2026-04-01: $102.50, 45% cash and 55% stock. Synaptics countered at $120 with more cash on 2026-04-20.
  • Party A then went quiet. SYNA rose 74% from 2026-04-01 to $126.55 on 2026-05-11, and Party A's adviser said it was concerned about that rise. onsemi's first written offer was 1.340 ON shares on 2026-05-27, raised to 1.350 at signing.
  • Synaptics contacted Parties B to F as well. Party F declined, and E and F never signed NDAs.

The October filings add the ending [SEC: Synaptics 8-K, 2026-10-01, 0001140361-26-038301]. Party A sent an unsolicited, non-binding proposal on 2026-09-02. After talks, Synaptics' board decided the revised Party A proposal was a "Superior Proposal", which triggered onsemi's match right. onsemi then offered the A&R terms, and the board decided Party A's proposal "no longer constituted a Superior Proposal." Party A's September price, its cash/stock mix and its identity are not in any filing read. They should appear in Synaptics' upcoming preliminary proxy. No termination fee was paid, since the June agreement was amended rather than terminated.

Market read. ON rose +4.2% on 2026-10-01 ($76.87 → $80.08) and +6.0% on 10-02 ($84.89). SYNA rose +14.1% on 10-02 to $121.10. At $119.46 (10-07), SYNA trades ~2.96% below the $123 cash. Context only, not advice.

What held

The core business case carries. The Q2 FY2026 Form 10-QThe quarterly version of the annual report. Lighter, and not audited. (quarter ended 2026-07-03) shows revenue of $1,603.5M, +9% YoY, gross margin 38.4% (37.6% a year earlier) and net income attributable of $226.8M [SEC: 10-Q, 2026-08-03, 0001097864-26-000017]. That is consistent with the June dossier's "real bottom" read. The termination fees, End Date and Synaptics-side protections are unchanged. The strategic case ("Physical AI": power, sense, connected compute, control) is restated in the same words.

Phase A — Understand the business

Company Overview — carried

See the previous dossier Lens 1.

Supply Chain — carried

See the previous dossier Lens 2. New from onsemi: "insourcing of a portion of Synaptics' production" is now a named synergy [SEC: 8-K Ex-99.1, 2026-10-01]. Synaptics is fabless today, so this would move some wafer or back-end work into onsemi's own fabs. No volume or timing was given.

Competitive Advantages — carried

See the previous dossier Lens 3.

Segments — carried

See the previous dossier Lens 4. The Q2 10-Q segment detail was not re-tabled in this delta.

Phase B — Measure performance

Earnings Result — re-run (Q2 FY2026, reported 2026-08-03)

Revenue $1,603.5M vs $1,468.7M (+9%). Gross margin 38.4%, with PSG at 27.8% (from 25.9%) and AMG at 53.4% (from 50.7%). Net income attributable $226.8M vs $170.3M [SEC: 10-Q, 2026-08-03]. Buybacks were 8.8M shares for $677.5M in H1 2026 [SEC: 10-Q, 2026-08-03], in line with June's promise to keep capital returns going during the deal. The June dossier's Q2 setup (implied GM ~39–40%) came in slightly light at 38.4%.

Earnings Calls — carried

Comps — carried

Stock-Price Catalysts — carried, with two new dates

2026-10-01 (+4.2%) and 2026-10-02 (+6.0%) on the switch to cash. ON is still below the June 29 analysis price of $88.58.

Phase C — Judge people & books

Management — re-run

The June dossier called Synaptics "the single biggest test of his capital-allocation judgment." Two new facts:

  1. onsemi paid more cash value than its own stock was worth, to keep the asset. That is a price discipline question for Connor's read. The headline price fell from ~$7B to ~$5.7B only because ON's own stock fell. In stock terms, onsemi bid up.
  2. It chose debt over a falling currency. With ON down a third from signing, paying in shares would have meant issuing more of them against a higher competing bid. Cash avoids that. Management now promises immediate non-GAAP accretion and unquantified extra synergies [SEC: 8-K Ex-99.1, 2026-10-01]. Lens 14 Q1 (revenue-synergy math) is still unanswered, and now matters more.

Forensic Red Flags — re-run (leverage line only)

At 2026-07-03: cash $3,514.5M plus short-term investments $350.0M; long-term debt $3,657.3M, up from $2,980.5M at year-end, mostly from new 2031 0% convertible notes (carrying value $1,474.0M) [SEC: 10-Q, 2026-08-03]. The deal adds up to $2.45B of senior secured term loan [SEC: 8-K Ex-10.1, 2026-10-01]. Rough cash call: about $3.25B from the balance sheet if the $5.7B is all funded by onsemi. The June line "the all-stock structure avoids adding debt" no longer holds. Goodwill risk is unchanged in kind.

Phase D — Project & stress-test

Forward Projection — re-run (Synaptics adjustment only)

The June base case did not bake in a Synaptics number and flagged "a wide error bar" around ~12% DilutionIssuing new shares, so each existing share owns a smaller slice of the same company.. Under the A&R terms, the share-count drag is gone (apart from rolled-over employee awards). It is replaced by interest on up to $2.45B and lost interest on ~$3B of cash. The term-loan rate is not in the 8-K body (it sits in the Ex-10.1 fee and term schedules, not reviewed), so no EPS bridge is computed here. The FY2027–28 rows from June carry until the proxy or Q3 print gives the numbers.

Bull vs Bear — carried

One edit to the bear case. "Dilutes holders ~12%" is replaced by "levers the balance sheet by up to $2.45B to win a contested deal."

Devil's Advocate — re-run (one point)

A short seller would now say: a rival thought Synaptics was worth more than onsemi's June offer at September prices, and onsemi paid up in cash rather than walk away with a $235M fee. The answer is in the numbers onsemi has not given: the size of the extra synergies and the loan's cost.

Management Questions — carried, two added

  1. What is the all-in cost of the $2.45B term loan, and how fast will it be repaid relative to the $6.0B buyback authorization?
  2. What did Party A's September proposal offer, and why was matching it worth more than the $235M fee onsemi would have received?

How our view changed

2 dossiers

Every dossier we have written on ON Semiconductor, newest first.

  1. current

    The Synaptics deal changed shape. In June onsemi offered 1.350 of its own shares per Synaptics share (about $7B, worth $156.25 a share on signing day)…

  2. A real cyclical bottom (Q1'26 inflected — rev +5%, GM back to 38.5%, AI-datacenter power doubling) that management just clouded with a $7B all-stock S…

Research trail

The research around ON Semiconductor

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