Onsemi in advanced talks to acquire Ferric as AI data center power demand surges

Onsemi, a Scottsdale-based semiconductor company specializing in power and analog chips, is in discussions to acquire Ferric, a New York-based startup focused on integrated voltage regulators (IVRs) for high-performance processors. The deal, which could be worth around $1 billion and might include performance-based payments, would expand Onsemi’s footprint in the AI data center market, where power efficiency is increasingly critical.

Ferric was founded in 2010 and has developed thin-film magnetic inductor technology aimed at improving power delivery to chips. The company claims its IVRs can reduce *voltage droop*—a power fluctuation that occurs when chips demand more energy—by up to 57% compared to traditional solutions. This is particularly relevant for AI accelerators and high-performance processors, which require stable, precise power to operate efficiently. Ferric’s IVRs sit directly next to processors, converting power into the exact voltage needed—a final step in the power delivery chain that Onsemi’s existing silicon carbide and gallium nitride technologies address at the system level.

The acquisition comes as Onsemi prepares to outline its AI data center strategy at its upcoming Investor Day on September 16, 2026. At that event, the company projected AI data center revenue would exceed $2.5 billion annually by 2030, up from an expected $500 million in 2026. This aligns with broader industry trends, including a shift toward higher-voltage architectures in data centers—a transition Ferric’s technology is designed to support.

Ferric has raised about $41.8 million in total funding, including a $32.1 million Series C round in December 2024. While its exact revenue remains private, the company has outlined ambitious growth targets, including a long-term vision of scaling to $11 billion in revenue—a trajectory that mirrors Onsemi’s own expansion plans.

The potential deal raises questions about Ferric’s future. The startup has operated independently for over a decade, carving out a niche in power delivery while most competitors focus on broader semiconductor or system-level solutions. If acquired, Ferric’s technology would integrate into Onsemi’s portfolio of high-efficiency power components, which already includes solutions for automotive electrification and industrial applications. For Ferric’s team, the move could accelerate the commercialization of its IVRs, which are seen as essential for next-generation AI hardware.

What to watch next: The final terms of the deal will depend on Ferric’s ability to meet performance targets, particularly as AI data center operators prioritize power efficiency. Onsemi’s Investor Day will be the next key signal of how it plans to capitalize on this segment, including whether Ferric’s technology becomes central to its AI strategy. The discussions reflect a broader industry shift: as AI workloads grow, the components that deliver power to chips are becoming just as critical as the chips themselves.

Sources: cryptobriefing.com