What Onsemi’s $6.9 Billion Hostile Takeover Means for the Automotive Chip Market

Onsemi’s recent $6.9 billion hostile bid for Allegro MicroSystems has sent shockwaves through the automotive semiconductor industry. Offering $35.10 per share, Onsemi is making an aggressive play to acquire a key player in a rapidly evolving market where power management and sensor technologies are becoming more critical for the automotive industry. 
 

As automakers push for automation, the demand for advanced semiconductor solutions has skyrocketed. Allegro MicroSystems specializes in these essential automotive components, making it a strategic target for Onsemi. 
 

Since its 2021 rebrand, Onsemi has sharpened its focus on EV powertrain solutions, SiC power devices, and sensing technologies, exiting low-margin businesses to strengthen its automotive  portfolio. 


 

Allegro MicroSystems’ expertise in power and sensing solutions makes it a strategic acquisition target for Onsemi. Its advanced innovation of magnetic sensors, including Hall-effect and current sensors, which optimizes battery management and powertrain efficiency in EVs, helped extend driving range and ease range anxiety, which alleviates concern among new EV adopters. 
 

Additionally, its motor driver ICs, particularly brushless DC motor drivers, play a crucial role in cooling fans, HVAC systems, and electric power steering (EPS), further boosting vehicle efficiency. 
 

Acquiring Allegro would secure a complementary portfolio that strengthens Onsemi’s position in the rapidly evolving EV and ADAS markets, giving it a competitive edge in shaping the automotive technology. 
 

However, the nature of this acquisition raises questions. Unlike a traditional deal where both companies negotiate terms, a hostile takeover occurs when the acquiring company bypasses the target’s management and directly appeals to shareholders. 
 

Whether Onsemi’s bid prevails or not, one thing is certain—EV adoption is accelerating, and the demand for smarter, more connected vehicles is growing and semiconductor companies will continue to push boundaries, shaping the next era of mobility.