Renesas buys American chipmaker IDT for $6.7 billion

Japan’s Renesas, which designs and manufactures chips, has announced that it is acquiring the American chipmaker Integrated Device Technology for $6.7 billion, or about 5.7 billion euros.

Renesas reports that the boards of directors of both companies have approved the acquisition. It is expected that this will be completed in the first half of next year, after approval from the necessary regulators and the shareholders of IDT. The Japanese company says it wants to meet the “growing demand for high data processing performance” with the acquisition. In addition, it wants to grow in the field of data centers and infrastructure, and strengthen its position in the field of industry and vehicles.

Reuters writes that the acquisition is mainly intended to increase its share of the market for chips for cars. Renesas would hold 30 percent of the global market in this area, ranking second behind NXP. The news agency quotes Renesas CEO Bunsei Kure as saying: “We were weak on chips for wireless networks, which are needed for internet-of-things and connected vehicles. We wanted to have these kinds of products in-house.”

Founded in 1980, IDT is headquartered in San Jose, California. It is not the first American chipmaker to be acquired by Renesas, for example, the Japanese company acquired Intersil in 2016 for an amount of 3.2 billion dollars. It completed that acquisition in February 2017. With that, it wanted to focus on making car components.