An on-chip inductor structure includes top and bottom metal plates that are formed to surround a conductor coil formed between the top and bottom plates, but is separated therefrom by intervening dielectric material. The top and bottom plates are preferably formed from a ferromagnetic alloy, e.g. Permalloy, and are subdivided into a plurality of space-apart segments, thereby reducing eddy currents. The number of segments is optimized based upon the process technology utilized to fabricate the structure. Preferably, a finite gap is formed between the top plate and the bottom plate, the height of the gap being chosen to adjust the total inductance of the structure.