Japan's Renesas Electronics Corp said it had agreed to buy Integrated Device Technology Inc (IDT)for $6.7 billion, its second major acquisition as it deepens its push into semiconductors for self-driving cars.
The deal for the US chip design firm underscores fierce competition between global chipmakers as they seek to boost their product line-ups and market share in the highly lucrative field of automotive chips.
Renesas is second only to NXP Semiconductors NV in auto-related chips and commands 30 percent of the global market for microcontrollers used in cars. But it is weak in so-called analog chips which process signals from things such as sound, light or temperature into digital data.
In particular, Renesas has been keen to get its hands on IDT's know-how in analog semiconductors for wireless networks and sensors - expertise crucial to develop autonomous driving and connected car technology.
It will pay $49 per share in cash for IDT's outstanding shares, a 16 percent premium to their closing price on Monday. "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," Renesas Chief Executive Officer Bunsei Kure told a news conference.
Renesas said that the combination with IDT will allow the Japanese firm to provide more comprehensive chip systems for its clients. IDT is also strong in chips for data centers, opening up a new stream of revenue for Renesas.
Renesas' stock climbed 4 percent higher in afternoon trade, regaining some ground lost in a 14 percent slide since the Japanese firm said it was considering buying IDT on Aug. 31. While IDT has averaged nearly 20 percent revenue growth in the past four reported quarters, some analysts worry.
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