This acquisition by Renesas Electronic Corp will result in the diversification of its portfolio and could see its sales chart boom due to the intensifying usage of electronic components in the auto industry.
Midst a rising wave of consolidation taking place in the global semiconductor industry, Japan’s Renesas Electronics Corp has reported that it is set to acquire Intersil Corp, a U.S. chip manufacturer, for $3.22 billion.
Renesas controls almost 40% of microcontroller chips globally. These are typically used in automobiles. It now aims to complete the acquisition by June 2017.
Sluggish growth in smartphones and in the personal computer industry has resulted in a wave of mergers, with chip manufacturers exploring new areas for growth, which now includes electronics in automobiles.
By the end of 2015, Tokyo-based Renesas had gained the position of the world’s third-largest chip manufacturer by market share, as per Gartner, a market research firm.
The company has disclosed that it will put to use its cash for the acquisition.
Intersil’s chips have wide usage ranging from industrial, mobiles and communication infrastructure applications.
After this acquisition, Renesas’ portfolio in analog chips, which process signals such as sound, light and temperature before converting them into digital signals, is set to grow manifold.
Renesas has beaten U.S. suitor, Maxim Integrated Products Inc. for this acquisition since Intersil got lured by its extensive network of automotive clients which could significantly boost its auto-related business, said sources.
They went on to reveal that San Jose, California-based Maxim has been on the lookout for a potential buyer for a while now. In the still fragmented market of analog chips, it was at the center for potential consolidation.
Maxim officials could not immediately be reached for comment.
Japan’s Nikkei, a business daily, was the first to report in August that Intersil’s had started negotiations with Renesas.
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