Synaptics tie-up dims onsemi's growth path, TD Cowen says
TD Cowen cut onsemi to Hold from Buy, arguing the all-stock acquisition of Synaptics complicates the company’s investment thesis by diversifying beyond a pure automotive/datacenter growth story. The target price was trimmed to $110 from $115. While management touts synergistic and AI-driven opportunities, Cowen questions whether Synaptics’ edge AI processors will help onsemi compete with larger peers and notes limited detail on revenue opportunities beyond cross-selling. The firm projects roughly 12% equity dilution and meaningful earnings accretion not until 2028–2029, and highlights near-term challenges like elevated inventories and pricing pressure in the power-discrete portfolio, even as the deal aims to broaden addressable markets with about $200 million in annual synergies.
