Semiconductor component maker Onsemi has been discussing an acquisition of 16-year-old chip startup Ferric for close to $1 billion, say people familiar with the matter—a deal that reflects growing demand for technology that can manage the intense energy needs of AI chips.

Onsemi’s talks with Ferric follow a similar acquisition by rival Analog Devices, which in May agreed to pay $1.5 billion to buy Empower Semiconductor, a 12-year-old startup whose devices help AI chips manage electricity more efficiently. It isn’t clear how the Onsemi deal is being structured. It could include payments to Ferric based on performance targets.