onsemi is buying Ferric for $600 million to move AI chip power right next to the processor

onsemi announced on Monday, Nov. 2, 2026, an agreement to acquire Ferric, Inc., an integrated voltage regulator (IVR) company, for $600 million in cash plus up to $175 million more if revenue milestones are hit.

Everyone talks about AI's power problem at the grid level; this deal is about the last few millimeters, where electricity actually reaches the chip. $600 million for roughly 50 engineers and a pile of patents is a bet that the next GPU generations will need their power regulated inside the package. The earn-out is the tell: onsemi pays the extra $175 million only if this rice-grain-sized hardware actually sells.

onsemi, which trades on the Nasdaq as ON and is based in Scottsdale, Arizona, agreed to buy Ferric for $600 million in cash at closing, plus up to $175 million more in cash if revenue milestones are hit. That extra payment is an earn-out: it is paid only if the sales actually show up. onsemi says it will pay with cash it already has. Those terms are the company's. The sale has not closed.

onsemi raised its 2030 revenue target for AI data centers by $500 million, to more than $3 billion. It says it expects the IVR business to grow faster for several years after that. It expects the deal, once the business is at scale, to add to its long-term targets for revenue growth and gross margin, the share of a sale left after the cost of making the product. It also says the deal should not move the numbers in any meaningful way in the near term. Those lines are onsemi's. They are expectations, not results.

The bet is about the last few millimeters of the power path. As AI processors draw more electricity, the industry is moving voltage regulation closer to the chip, so less energy is lost on the way and the supply can react faster when demand jumps. Ferric's regulators pack the power controller, the FETs (the small switches that control the current), and the inductors and capacitors that store energy and smooth the flow into one compact package. That package can sit inside the processor package or on its substrate, the base the chip is built on. onsemi says this cuts board area by 50% to 70% versus the usual separate parts, so more of a system's power budget can go to computing. It calls that improving tokens per watt. A token, here, is a unit of AI output. Those lines are onsemi's.

Ferric's Fe1766, on Ferric's own products page, is a 16-phase regulator that delivers 160 amps from a package 8 by 4.4 millimeters and 1.0 millimeter thick. Sixteen phases means sixteen small power circuits sharing the job, so a part this small can deliver 160 amps, a heavy current. Those specifications are Ferric's.

Ferric has more than a decade of work on these regulators and on the advanced magnetics inside them, the magnets that let the parts stay small, and more than 40 patents. About 50 Ferric employees, mainly in New York and Silicon Valley, are expected to join onsemi. Those lines are onsemi's.

The companies expect to close by the end of 2026, if the usual closing conditions are met. Those are the approvals and paperwork still ahead of the sale. Barclays and Morrison & Foerster are advising onsemi. UBS and Cooley are advising Ferric. Those lines are the release's.

Hassane El-Khoury, onsemi's president and chief executive, said: "The rapid growth of AI is reshaping the requirements for power delivery to increasingly capable and power-intensive processors." Noah Sturcken, Ferric's founder and chief executive, said: "Ferric was founded to rethink how power is delivered at the point of compute." Those quotations are theirs.

The picture is Ferric's own product photograph: four of its integrated voltage regulator chips standing on end beside a single grain of rice, for scale. The credit is Ferric.

In plain terms, onsemi is paying $600 million in cash, and up to $175 million more only if the hardware sells, for a company of about 50 people whose chips regulate power inside the processor package. It also lifted its 2030 AI data-center revenue target by $500 million, to more than $3 billion. Closing is still expected by the end of 2026.