Following the announcement of its largest-ever acquisition, the stock price of Onsemi plummeted, prompting its CEO, Hassane El-Khoury, to publicly defend the company's core business strategy.

The acquisition of Synopsys is aimed at accelerating the company's expansion into the physical artificial intelligence sector.

In an interview, El-Khoury stated that this acquisition "is highly complementary to our existing, solid business portfolio."

Synopsys (SYNA) shares rose $0.23, or 0.18%. Onsemi (ON) shares fell $27.08, or 22.81%.

Onsemi CEO Hassane El-Khoury stated that the acquisition of Synopsys will open up an incremental $30 billion market opportunity for the company.

To seize the development opportunity in physical AI, Onsemi announced the completion of its largest acquisition to date, after which its stock price fell by 20%. CEO Hassane El-Khoury publicly stepped forward to defend the company's core business.

The company, which primarily focuses on power components and sensing chips for the automotive sector, announced on Thursday that it will acquire edge AI and wireless connectivity solutions provider Synopsys in an all-stock transaction.

In the announcement, Onsemi stated that this strategic shift into the physical AI track will add $30 billion to its total addressable market, bringing the company's overall target market size to $243 billion by 2030.

El-Khoury said in a program on Friday, "This is precisely the strategic value of this acquisition. The deal is comprehensively complementary to the solid business foundation we have already built."

He stated that this acquisition will also open up new markets for the company, focusing on the AI computing platform sector.

Onsemi is betting on a future market trend where various physical hardware systems can achieve real-time sensing and autonomous decision-making, with typical applications including robotics and autonomous vehicles.

The company stated that Synopsys's Astra platform, equipped with AI processors and wireless communication technology, will strengthen its own edge AI capabilities. Edge AI refers to running AI algorithms directly on local hardware devices.

El-Khoury said, "There is no overlap in the product lines of the two companies, which is also a core reason why this acquisition is highly valuable from both a research and development and product perspective."

The executive also revealed that the company's data center business operations are stable, with business growth continuing to accelerate.

"The business foundation we have built is very solid, and future performance will continue to be delivered. We are confident in our core business, and our main operations remain highly competitive."

Onsemi expects this acquisition to be completed by mid-2027. Within 18 months after the deal closes, it is projected to achieve $200 million in annual synergies.