Renesas has added mixed-signal analogue punch to its portfolio by acquiring Integrated Device Technology for $6.7bn. The boards of directors of both companies have unanimously approved the transaction. Closing of the transaction is expected to occur in the first half of 2019, following approvals by IDT shareholders and the relevant regulatory authorities.
The acquisition gives Renesas access to IDT’s analogue mixed-signal capabilities in embedded systems, including RF, advanced timing, memory interface & power management, optical interconnect, wireless power, and smart sensors. The combination of these product lines with Renesas’ advanced MCUs and SoCs and power management ICs enables Renesas to offer comprehensive solutions that support the increasing demand of high data processing performance.
The IDT analogue mixed-signal products for data sensing, storage and interconnect are key devices that support the growth of data economy. Acquisition of these products enables Renesas to extend its reach to fast-growing data economy-related applications including data center and communication infrastructure, and to strengthen its presence in the industrial and automotive segments.
Renesas anticipates near- and long-term revenue growth from expanded opportunities and access to fast-growing industries, and cost savings from a greater scale business platform to bring innovation and improvements with an expected financial impact of approximately over US$250 million (non-GAAP operating income per year on a run rate basis).
“This acquisition will bring us complementary, market-leading analogue mixed-signal assets and an incredibly talented group of professionals to help us boost our embedded solution capabilities,” said Bunsei Kure (pictured), Representative Director, President and CEO of Renesas. “IDT’s products combined with our MCUs, SoCs and power management ICs will enable Renesas to widen its product offerings as well as to expand its reach into areas such as the growing data economy-related space.”
“The combination of Integrated Device Technology’s analogue mixed-signal leadership with Renesas’ world-leading microcontroller and automotive/industrial franchise creates a new global powerhouse,” said Gregory L. Waters, President and CEO of IDT. “The Combined company will possess the key capabilities that customers in the modern data economy demand.”
Since 2016, Renesas has been executing its growth strategy to thrive in the global marketplace and become a global leading embedded solution provider. As part of this initiative, Renesas has been working to expand its analogue solution lineup and to strengthen its kit solution offerings that combine its microcontrollers (MCUs), system-on-chips (SoCs) and analogue products.
These efforts will be underpinned by revenue growth in its focus domains: automotive segment, which is expected to see tremendous growth with autonomous driving and EV/HEV; industrial and infrastructure segments, which are expected to advance with Industry 4.0 and 5G (fifth-generation) wireless communications, as well as the fast-growing IoT segment. Renesas views accretive acquisitions as key enablers in achieving this growth strategy to deliver further incremental growth.