Japan’s Renesas Electronics Corp has, in a latest statement, said that the company has agreed upon a deal to buy Integrated Device Technology Inc. for $6.7 bn. This marks the second notable acquisition for Renesas as the company looks to dive deeper into the field of semiconductors for driver-free or self-driving vehicles. As for the U.S. chip company, the deal highlights the intense level of competition among international chipmakers as companies seek to improve their product portfolios and market share in the highly promising automotive chips industry.
Renesas holds a significant share of 30% in the global automotive microcontrollers industry and is second only to NXP Semiconductors NV. However, in the area of analog chips, the microcontrollers that enable signal processing from entities such as light, sound, or temperature into digital information, the company still has a long way to go.
Particularly, the company has been keen on gaining IDT’s intelligence in the field of analog semiconductors for wireless sensors and networks, skillset essential for moving ahead in the field of connected cars and autonomous driving. According to Renesas, the collaboration will allow the company to develop more comprehensive products for its clients.
While it is true that IDT has recorded a nearly 20% rise in revenue over the past four quarters, some analysts are hesitant about the actual benefits that the deal will bring or how they will be achieved as IDT does not have a lot of automotive clients. Thus for bringing the chips up to the level necessary for automotive companies will not be an easy task. Moreover, IDT only generates about 11% of its revenue from the industrial and automotive industries.