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ON Semiconductor suffered its worst single-day stock decline since 2020, rattling investors as the company's chief executive stepped forward to defend the acquisition of Synaptics.
The move into what management calls "physical AI" is at the center of the dispute, with ON Semiconductor arguing the deal expands its total addressable market by an additional $30 billion.
What "Physical AI" Means and Why It Matters Physical AI refers to artificial intelligence that operates in and interacts with the physical world — think industrial robots, autonomous vehicles, and smart sensors — as opposed to software-only systems that process data in the cloud.
The term sits at the intersection of semiconductor design and the broader AI buildout, and it has become a strategic rallying point for chipmakers trying to position themselves beyond traditional end markets.
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