Touchscreen chipmaker company Synaptics, Incorporated (NASDAQ:SYNA) has announced that it will be acquiring Renesas Electronics Corporation (TYO:6723), the sole supplier of display chips for the iPhone. The deal is worth $475 million.
Synaptics also raised its revenue forecast for fourth quarter ending June 30th. Apple Inc.(NASDAQ:AAPL) failed to make progress in its talks to buy the majority stake of Renesas SP Drivers Inc from Renesas Electronics. This allowed Synaptics to make a deal. Synaptics is going to integrate its touch technology with Renesas’ display drivers into one chip, which will save on manufacturing costs.
Synaptics’ chips are used in Samsung Electronics devices like the Galaxy S5 and Galaxy Note 3. Renesas Electronics has a 55% stake in Renesas SP Drivers while Sharp has a 25% stake and Powerchip holds the rest. Synaptics said that the deal was expected to add to adjusted profit after its expected close in the fourth quarter.
Renesas SP Drivers posted revenue of $650 million and cash flow of around $100 million for the year ended March. Synaptics raised fourth quarter revenue forecast to $300-$310 million from $275-$295 million because of better-than-expected sales of mobile and PC products. The popularity of fingerprint readers for unlocking mobile phones will also drive growth at Synaptics.