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If you were worried that the AI buildout might be running out of road, ON Semiconductor Corp. (ON) CEO Hassane El-Khoury would like a word.
El-Khoury expects rising compute requirements across AI data centers, automotive and industrial markets to drive semiconductor demand, while new technologies and the planned Synaptics Inc. (SYNA) acquisition expand the company's longer-term opportunity.
El-Khoury told CNBC that ON Semiconductor currently sees a $213 billion total addressable market for its core business. That figure excludes the roughly $30 billion opportunity associated with its pending Synaptics acquisition.
Once the transaction closes, he expects the combined addressable market to exceed $243 billion.
“Compute is going to be at the center of everything we do here,” El-Khoury said.
He argued that combining Synaptics with ON Semiconductor would create complementary capabilities, saying the companies together could produce value where “1 + 1” becomes “more than 2.”
El-Khoury said integration planning is progressing well, although the companies must continue operating independently until the deal closes.
El-Khoury pushed back against concerns that regulation or decisions by frontier AI companies could slow infrastructure spending.
“I don’t think a slowdown is anywhere on the horizon,” he said.
He pointed to committed data-center projects that provide visibility beyond the next couple of years, including ON Semiconductor’s view of its 2027 AI data-center revenue.
The company anchored its outlook to roughly 30% market growth and expects additional content growth as customers deploy more computing capacity.
El-Khoury said ON Semiconductor expects its AI data-center total addressable market to grow about 40%, while the business is growing more than 100% in 2026 and 2027.
He sees power semiconductors as a direct beneficiary because expanding compute infrastructure requires increasingly more power.
ON Semiconductor identified a 53% gross margin target, but El-Khoury characterized that level as a milestone rather than an endpoint.
He expects newly introduced technologies across automotive, AI data centers and industrial applications to represent a larger share of revenue over time and improve the company’s product mix.
El-Khoury said ON Semiconductor has already delivered step-function margin improvements as it ramps newer technologies and expects the company to reassess its margin opportunity once it reaches the 53% milestone.
ON Semiconductor is targeting about $11 billion in revenue by 2030, with a 12% to 14% compound annual growth rate, up from its previous 10% to 12% model.
Management expects AI data centers to drive much of that growth, with AI-related revenue potentially rising from about $500 million in 2026 to more than $2.5 billion by 2030, while automotive and industrial businesses are expected to grow about 9% and 10% annually, respectively.
ON Price Action: ON Semiconductor shares were up 2.24% at $68.08 during premarket trading on Thursday, according to market data.
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