onsemi Shares Climb on GlobalFoundries GaN Chip Partnership
The collaboration targets high-growth AI data center and automotive markets with next-generation power-efficient semiconductors.
Shares of onsemi (NASDAQ: ON) gained ground following the announcement of a strategic partnership with GlobalFoundries (NASDAQ: GFS) to develop and manufacture next-generation gallium nitride (GaN) power semiconductors. The collaboration aims to produce high-efficiency 650-volt GaN devices, targeting the explosive demand from AI data centers, electric vehicles, and renewable energy sectors.
The deal, announced Thursday, unites onsemi’s expertise in power device design and packaging with GlobalFoundries' established 200mm GaN-on-silicon manufacturing process. This move is a key part of onsemi's ongoing strategic shift to focus on high-margin, intelligent power and sensing solutions for the automotive and industrial markets, a strategy championed by CEO Hassane El-Khoury.
Gallium nitride is a wide-bandgap semiconductor material poised to displace traditional silicon in power applications due to its superior performance. GaN devices can operate at higher voltages, temperatures, and frequencies, resulting in power systems that are smaller, lighter, and significantly more energy-efficient. For AI data centers, this translates to lower energy loss and higher power density for server racks, a critical factor in managing the immense power consumption of AI compute systems. In electric vehicles, more efficient GaN-based inverters can extend driving range and reduce charging times.
Under the terms of the agreement, the companies expect to have samples of the new GaN power devices available to customers in the first half of 2026, with plans to rapidly scale to volume production. "By combining GlobalFoundries’ deep experience in GaN semiconductor manufacturing with onsemi’s leadership in power and packaging, we are creating a robust supply chain for this critical technology," an onsemi spokesperson commented in the official press release.
This partnership is the latest in a series of aggressive moves by onsemi to dominate the GaN market. In October 2025, the company unveiled its own proprietary vertical GaN (vGaN) technology, which it claims can reduce energy loss by nearly 50% compared to existing solutions. The company also announced a memorandum of understanding with Innoscience earlier in December to expand its portfolio of lower-voltage GaN devices.
These collaborations represent a multi-faceted approach to securing capacity and accelerating its GaN roadmap. By working with foundry partners like GlobalFoundries and Innoscience while simultaneously developing its own advanced vGaN technology, onsemi is building a resilient and diversified supply chain to meet soaring demand. This strategy allows the company, which has a market capitalization of approximately $22.5 billion, to competitively challenge other major players in the power semiconductor space.
The strategic focus on premium, specialized chips is designed to capture higher margins and establish onsemi as a leader in the most lucrative segments of the semiconductor industry. While the company's Q3 earnings showed a year-over-year revenue decline, its emphasis on silicon carbide (SiC) and now GaN positions it strongly for future growth cycles driven by vehicle electrification and AI infrastructure build-outs. With an average analyst price target of around $58.70, Wall Street appears to see further upside as these strategic initiatives mature and contribute to the company's financial performance.