Japanese Chip Maker Renesas in Talks to Buy Integrated Device Technology

By Anonymous

TOKYO—Japanese chip maker Renesas Electronics Corp. RNECY 3.70% said Friday that it was in the late stages of negotiations to acquire California-based Integrated Device Technology Inc., IDTI 12.29% seeking to strengthen its position as a major provider of autonomous-driving components.

The acquisition, if completed, would be for about $6 billion, a person with direct knowledge of the matter said. He said the deal was one of several options being reviewed by the Tokyo-based company and isn’t final.

Renesas was formed through a fusion of the chip-making units of NEC Corp., Mitsubishi Electric Corp. MIELY 0.02% and Hitachi Ltd. HTHIY 0.09% A state-backed fund, Innovation Network Corp. of Japan, is the company’s largest shareholder, with a 33.38% stake.

The Japanese company has been accelerating efforts to develop semiconductors used in vehicles so that it can keep pace with the rapidly consolidating industry. Netherlands-based NXP Semiconductors NXPI 1.03% NV spent nearly $12 billion to buy Freescale Semiconductor Inc. in 2015, while Renesas itself acquired another U.S. chip maker, Intersil Corp., for about $3.2 billion in a deal completed in 2017.

Renesas was the second-largest semiconductor supplier in the automotive industry by revenue in 2017, following NXP, according to IHS Markit data.

Integrated Device Technology is a Nasdaq-listed company known for components used in device-to-device wireless communications. It had revenue of $843 million in the year ended April 1. The company’s market capitalization was $4.88 billion as of the close of trading Thursday in the U.S.

The Japanese business daily Nikkei reported the Renesas-IDT talks earlier on Friday.

Write to Takashi Mochizuki at [email protected]