Renesas Electronics Agrees To Buy IDT For $6.7 Billion

By Noah Long ● September 13, 2018

Japan-based Renesas Electronics has announced an agreement to buy San Jose, California based Integrated Device Technology (IDT) for $6.7 billion. IDT is known for building high-performance mixed-signal semiconductor platforms. IDT’s semiconductor solutions technology is often used in self-driving vehicles. Renesas is going to pay $49 per share in cash for IDT’s outstanding shares, which is a 16% premium to its closing price on Monday.

When it comes to auto-related chips, Renesas is towards the top of the market behind NXP Semiconductors. And Renesas has a 30% market share for microcontrollers used for cars, according to CNBC. However, Renesas lacks analog chips — which is what processes signals from sound, light, and temperature into digital data. IDT makes about 11% of its revenue from automotive and industrial businesses.

Renesas will gain access to IDT’s strengths in building analog semiconductors for wireless sensors necessary for autonomous vehicles. With the IDT acquisition, Renesas also said it would be able to provide more comprehensive chip systems for customers. And IDT is adept at designing chips that are optimal for data centers, which could be a potential new revenue stream for Renesas.

“We were weak in chips for wireless networks needed for the Internet of things and connected cars. We’ve been wanting to get such assets,” said Renesas CEO Bunsei Kure in a news conference. Last year, Renesas also acquired Intersil for $3.2 billion — which should also complement IDT.

The Committee on Foreign Investment in the United States (CFIUS) has to approve of the deal for it to go through. But Renesas is confident that this process should be straightforward.