Renesas to buy IDT for $6.7 bn to enhance self-driving car tech business

Japan-based chipmaker Renesas Electronics is set to buy Integrated Device Technology (IDT) for about $6.7 billion as part of the strategy to enhance business from self-driving car technology.
Renesas chipset
The deal allows Renesas, second only to NXP Semiconductors in chips used in cars, to bring on board IDT’s know-how in chips for wireless networks and data storage which are crucial for self-driving cars.

Recently, Qualcomm missed a big opportunity to buy NXP Semiconductors when China did not approve the deal.

Renesas will pay $49 per share in cash for all IDT outstanding shares, compared with Monday’s close at $42.08, and expects the deal to close in the first half of 2019.

Renesas will finance the acquisition with 679 billion yen or $6.1 billion of bank loans and cash.

Renesas last year bought US chipmaker Intersil for $3.2 billion to expand its portfolio in analog chips, which process signals such as sound, light and temperature before converting them into digital signals.

The strategy of Renesas is to expand its analog solutions and strengthen its kit solution that combine its microcontrollers (MCUs), system-on-chips (SoCs) and analog products. The aim of Renesas is to enhance revenue in its focus domains: automotive segment, industrial and infrastructure segments, as well as IoT segment.

The acquisition of the US-based IDT will provide Renesas with access to analog mixed-signal capabilities in embedded systems, including RF, advanced timing, memory interface & power management, optical interconnect, wireless power, and smart sensors.

“IDT’s products combined with our MCUs, SoCs and power management 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,” Bunsei Kure, president and CEO of Renesas, said in a statement.

Renesas earlier posted second quarter sales of 203.5 billion yen (+9.5 percent quarter-on-quarter and +2.7 percent year-on-year) Renesas’s semiconductor sales were 199.1 billion yen (+9.4 percent from the previous quarter and +2.5 percent year-on-year). Automotive sales increased 1.7 percent year-on-year. Industrial sales increased 6.2 percent year-on-year, due to a strong demand in factory automation (FA) and home appliances.