Renesas Electronics Japan acquires Intersil, $3.2 billion pointing to automotive chip strategy

With the saturation of global hardware industry demands and fierce competition from various manufacturers, the global semiconductor industry is moving toward a bottleneck. Therefore, a wave of mergers and acquisitions has started.

According to Reuters, Japanese chip maker Renesas Electronics said today that it will buy US chip/chip maker Intersil Corp for US$3.219 billion.

Renesas ranks as the world's 16th largest wafer supplier in 2015. The company was formed in April 2010 by a merger of Renesas Technology and NEC Electronics, while Renesas Technology is Hitachi and Mitsubishi Electric. Semiconductor company formed by the semiconductor division of Mitsubishi Electric in 2003.

The company once ranked globally as a supplier of automotive semiconductors in 2014, but it ranked third in 2015 after NXP and Infineon.

Renesas Electronics, like many Japanese wafer makers, has been struggling to survive in recent years, and Intersil’s attraction is that the company’s wafers can be used in the growing industrial and automotive markets, with current developments. Look, industrial and smart cars are in their infancy, and they will generate massive outbreaks in the future with unlimited potential. The business of the industrial automotive sector may bring new vitality to Renesas Electronics, which is a bit of an embarrassment. Renesas is also working hard to increase its position in the automotive semiconductor market.

However, last month, some media revealed that Renesas Electronics intends to purchase Intersil with a consideration of 300 billion yen (about 3 billion U.S. dollars). At that time, Intersil’s pursuit was also the American listed company Maxim. In addition, industry observers believe that the purchase of Intersil, the price of 3 billion US dollars is considered too high, because the news of the acquisition with Renesas before the disclosure, the company's market value of about 2.12 billion US dollars.

However, from the formal confirmation of the acquisition, it is more than 200 million more than originally planned. This shows that Renesas Electronics is optimistic about Intersil and its clear strategic objectives in the automotive and industrial fields.