(Reuters) -Sensor integrated circuits provider Allegro Microsystems ( ALGM ) is drawing takeover interest from larger competitor ON Semiconductor, Bloomberg News reported on Sunday, citing people familiar with the matter.

Onsemi has been working with advisers in recent months to pursue Allegro, the Bloomberg report said, adding that it's possible other suitors could emerge for Allegro and the company hasn't indicated whether it would be open to a potential sale.

Semiconductor companies interested in bulking up their automotive capabilities could look at buying Allegro, the Bloomberg report said.

Onsemi said it does not comment on rumors and speculation. Allegro did not immediately respond to a Reuters request for comment.

Allegro has a market valuation of $4.11 billion while Onsemi is valued at $19.83 billion, according to LSEG data.

Manchester, New Hampshire-based Allegro on Monday appointed Mike Doogue as its president and CEO, succeeding Vineet Nargolwala.

Onsemi on Tuesday said it had initiated a restructuring plan aimed at reducing operational costs, resulting in the layoff of about 2,400 of its employees across all business divisions worldwide in 2025.

In February, the Phoenix, Arizona-based Onsemi forecast first-quarter revenue below Wall Street expectations, hit by softening demand for its automotive chips.