Chip Maker Renesas Buying Intersil in Automotive Push
Renesas will pay $3.2 billion for Intersil in a merger that officials say will expand the company's efforts in such areas as smart cars and the IoT.Chip maker Renesas Electronics is pushing into connected cars, the internet of things and other emerging markets with the planned acquisition of Intersil, the latest in a series of such deals in a processor space that is reacting to rapid changes in the tech industry. Renesas, a Japanese system-on-a-chip (SoC) maker, will buy U.S.-based Intersil for $3.2 billion in a deal that is expected to close in the second half of next year. Intersil's strength is in power management and precision capabilities in analog chips. The deal is expected to grow Renesas' capabilities in a wide range of market segments, particularly in the automotive space, which has been an increasing focus for both Renesas and Intersil. Renesas President and CEO Bunsei Kure reportedly has been closing factories and cutting jobs as he aggressively shifts the company's focus to the automotive technology space, which is increasingly accounting for more of Renesas' revenues. In the second quarter, revenue from the company's automotive business neared record levels. Intersil officials in July said that combined, the company's industrial and automotive businesses made up about half of Intersil's revenues. Automotive accounted for about 13 percent of overall revenues for Intersil. "Renesas is accelerating its focus of resources in automotive, industrial, infrastructure and the rapidly growing IoT segments to aggressively grow its global business and maintain its position as a leading provider," Kure said in a statement. "Intersil's extensive portfolio of analog and power devices as well as its strength in the automotive, industrial, and broad-based segments complement many of Renesas' initiatives in these areas."
In a briefing with journalists, the CEO said that Renesas will combine products from both companies into packages that can be sold to customers, according to Reuters. In addition, he told reporters that Renesas will "actively seek out" other acquisitions to grow the business. Renesas officials expect the Intersil deal to expand revenues by $170 million after four or five years.