Japan’s Renesas revs up for self-driving cars by buying IDT for $6.7bn

11 Sep 2018

Image: Metamorworks/Shutterstock

Market for auto electronics to power self-driving cars is switching up a gear.

Japan-based semiconductor maker Renesas is acquiring US chip company Integrated Device Technology (IDT) in a $6.7bn deal that focuses on self-driving technology.

Renesas is one of the world’s largest suppliers for automotive chips and is second only to NXP on supply. More than half of its revenues come from automotive electronics and it has a 30pc share of the global market for the microcontrollers (MCUs) that are used in cars today.

The decision to acquire IDT comes as Renesas deepens its push into self-driving cars. In particular, the Japanese company wants to get its hands on IDT’s know-how in the area of analogue semiconductors for wireless networks and sensors for connected cars.

Renesas will pay $49 per share in cash for IDT’s outstanding shares, representing a 16pc premium on the shares’ closing price on Monday (10 September) and an equity value of $6.7bn.

Industry 4.0 and 5G pave the road ahead for autotech

The acquisition of IDT comes as Renesas is working to expand its analogue solution line-up and to strengthen its kit solution offerings that combine its MCUs, system-on-chips (SoCs) and analogue products.

The company said it is paving the way for growth in industry 4.0 manufacturing and 5G wireless communications.

“This acquisition will bring us complementary, market-leading, analogue mixed-signal assets and an incredibly talented group of professionals to help us boost our embedded solution capabilities,” said Bunsei Kure, representative director, president and CEO of Renesas.

“IDT’s products combined with our MCUs, SoCs and power management integrated circuits (ICs) will enable Renesas to widen its product offerings as well as to expand its reach into areas such as the growing data economy-related space.”

San Jose-based IDT was founded 38 years ago, employs more than 1,600 people and has annual revenues of around $727.2m.

“The combination of Integrated Device Technology’s analogue mixed-signal leadership with Renesas’ world-leading microcontroller and automotive/industrial franchise creates a new global powerhouse,” said Gregory Waters, president and CEO of IDT.

“The combined company will possess the key capabilities that customers in the modern data economy demand.”

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years