Summary
- Onsemi will pay $600m in cash, with up to $175m of additional consideration tied to revenue milestones.
- Ferric's integrated voltage regulation technology combines power conversion components in compact packages.
- Onsemi has raised its 2030 AI data-centre revenue target to more than $3bn following the proposed acquisition.
Onsemi has agreed to acquire integrated voltage regulator specialist Ferric for $600m in cash, extending its power electronics portfolio into the circuitry used to deliver electricity directly to AI processors.
The agreement provides for up to $175m in additional payments tied to revenue milestones. Onsemi expects the transaction to close by the end of 2026, subject to customary conditions, and intends to finance it using existing cash resources.
Ferric develops integrated voltage regulator technology that combines control circuitry, switching devices, inductors, and capacitors within compact packages. Its architecture is intended to move power conversion closer to processors, reducing the distance over which high currents must travel.
Onsemi says the approach can reduce circuit-board area by 50% to 70% compared with conventional discrete voltage regulator solutions. The comparison concerns the power conversion circuitry rather than the footprint of a complete server, computing rack, or data-centre installation.
Modern AI accelerators can require substantial electrical power at relatively low operating voltages. Supplying that electricity becomes increasingly challenging as processor power demand rises and more components are concentrated within the same computing system.
Electrical losses are influenced by current and conductor resistance. Delivering large amounts of power at low voltage requires higher current, increasing pressure on connectors, circuit-board distribution, and thermal management.
One approach involves distributing electricity at higher voltages and converting it closer to the equipment consuming it. Integrated voltage regulators take this further by incorporating the final conversion stages within or close to the processor package.
Shortening electrical paths can reduce some distribution losses and improve the response to rapid changes in processor demand. It also concentrates power conversion components into smaller spaces, creating design requirements involving heat removal, reliability, packaging, and manufacturing.
Ferric’s technology incorporates magnetic components alongside control and switching functions. The company has developed more than 40 patents relating to its integrated voltage regulation and magnetic technology.
Onsemi intends to combine that engineering expertise with its existing semiconductor development, manufacturing, and customer relationships. Approximately 50 Ferric employees, primarily based in New York and Silicon Valley, are expected to join the company.
Power conversion moves towards the processor
The acquisition would expand Onsemi’s involvement across different stages of AI data-centre electrical systems, from power conversion and distribution equipment towards the final regulation of voltage supplied to processors.
The requirements change substantially along that path. Facility electrical infrastructure is designed around available capacity, distribution, protection, and resilience, while processor-level regulators must manage rapid changes in current within a tightly constrained physical area.
Higher processor power demand also increases the amount of heat produced by the associated conversion circuitry. Locating regulators closer to the processor may reduce some electrical losses, but the remaining heat still has to be removed through the computing system’s thermal design.
Onsemi says Ferric’s approach could allow a greater proportion of system power to be used for computing rather than conversion losses. The final benefit will depend on the processor architecture, operating conditions, and the efficiency of the complete electrical system.
Following the proposed acquisition, Onsemi has raised its 2030 AI data-centre revenue target by $500m to more than $3bn. The revised target reflects anticipated business growth rather than contracted revenue already generated by Ferric.
The company expects the acquisition to support long-term revenue growth and profitability as the technology reaches wider commercial use. It does not anticipate a meaningful immediate financial contribution.
Commercial adoption will depend on processor manufacturers and system designers integrating the technology into their equipment. Qualification, electrical performance, reliability, packaging, and manufacturing economics will influence the pace of deployment.
These developments may eventually affect the computing hardware installed within European data centres, although the acquisition does not itself involve a named European facility or a new operating deployment.
Investment in processor-level power regulation reflects the growing importance of electrical efficiency within AI computing hardware. As accelerator performance and power requirements increase, the final stages of voltage conversion are becoming an increasingly important part of system design.
Onsemi’s immediate priorities are completing the acquisition and incorporating Ferric’s technology into its product development programme. Wider deployment will depend on adoption by semiconductor and computing equipment manufacturers.
