Onsemi Announces $1.3 B Convertible Senior Notes Offering

Why It Matters

The shift to 800‑V power unlocks faster, more efficient AI compute and EV charging, positioning analog‑chip makers as essential growth engines in two of the fastest‑expanding tech segments.

Key Takeaways

• 800‑V architectures boost demand for analog chips
• Texas Instruments partners with NVIDIA on 800‑V power framework
• onsemi’s $6 B buyback and 7.5% short interest enable squeeze
• Silicon‑carbide tech now powers ~55% of new EVs
• BofA lifts TXN target to $370, ON to $138

Pulse Analysis

The physics of power delivery are reshaping the AI infrastructure landscape. As data‑center racks exceed 100 kW per unit, the I²R loss equation makes high‑voltage, low‑current distribution far more efficient. Moving from 48 V to 800 V cuts current by a factor of ten, slashing heat generation and allowing thinner copper conductors. This engineering imperative has turned analog power‑management chips into a bottleneck‑relieving commodity, with silicon‑carbide (SiC) devices and precision voltage regulators becoming indispensable for both AI accelerators and next‑gen electric vehicles.

Texas Instruments (TXN) and onsemi (ON) are uniquely positioned to capture this wave. Texas Instruments leverages its long‑standing analog expertise and a strategic partnership with NVIDIA to deliver end‑to‑end 800‑V DC power solutions, embedding its chips directly into AI server designs. onsemi, meanwhile, has bolstered its portfolio through the Aura Semiconductor acquisition and its industry‑leading SiC platform, now featured in roughly 55% of new EV models showcased at the Beijing Auto Show. Both firms report double‑digit growth in data‑center and automotive segments, reinforcing their roles as critical enablers rather than peripheral component suppliers.

From an investment perspective, the narrative extends beyond top‑line growth. onsemi’s $6 billion share‑repurchase program, funded by a $1.3 billion convertible note, signals management’s confidence that the stock is undervalued, while a 7.5% short interest creates a classic short‑squeeze setup if operational catalysts materialize. Texas Instruments enjoys low short interest and a diversified revenue base, but faces macro headwinds in the Chinese automotive market. Combined, the structural shift to 800‑V power, robust corporate balance sheets, and favorable analyst revisions make both stocks compelling candidates for investors seeking exposure to the long‑term AI and EV electrification trends.

Deal Summary

Onsemi (ON) announced a $1.3 billion convertible senior notes offering to fund its $6 billion share‑repurchase program and support ongoing R&D initiatives. The debt financing provides immediate capital while protecting the company’s growth investments. The announcement was reported on May 28 2026.