Japanese chip maker Renesas reportedly is in the final stages of a deal to buy U.S. rival Intersil for about $3 billion as it looks to bolster its position in the growing automotive technology space.
Reports from numerous news sites this week said the company, which competes with the likes of NXP and Infineon and is seeing other chip makers like Intel and Nvidia pushing their way into the autonomous vehicle space, could announce the acquisition soon.
The deal would continue a consolidation trend in the semiconductor industry as chip makers buy rivals to build out their capabilities and address such emerging trends as self-driving cars, data analytics, artificial intelligence (AI) and machine learning, the internet of things (IoT), mobility and the cloud. High-profile acquisitions in recent years include Intel buying programmable chip maker Altera for $16.7 billion, NXP acquiring Freescale for $12 billion and Avago Technologies grabbing Broadcom for $37 billion in a move to broaden its capabilities in such areas as IoT.
In a statement to Reuters, Renesas officials said they were looking at multiple options for growth, including a deal with a chip maker in the United States, but that no decisions had been made. Intersil officials have not commented on the reports.
Automotive is a key market for Renesas, and is a fast-growing area for Intersil. In the second quarter, revenue for the business was near record levels, officials said last month. In a July 28 conference call about the quarterly numbers, Intersil CEO Necip Sayiner said that combined, the company’s industrial and automotive businesses make up about half of Intersil’s revenues. Automotive accounted for about 13 percent of overall revenues.
There is a lot of attention being paid to the nascent autonomous vehicle space, and chip makers are expecting to play a key role. Most recently, Intel announced it is working with BMW and Mobileye on a project to bring self-driving cars to market in 2021. Analysts with Strategic Analytics said late last year that fully autonomous cars probably won’t emerge before 2025. IHS Automotive analysts are projecting that more than 20 million autonomous vehicles will be on the road by 2035.