[News Inside Companies] Betting on M&A, Japanese Semiconductor Company 'Renesas'

On the 15th, Renesas Electronics, a leading Japanese non-memory semiconductor company, announced its plan to acquire the U.S. electronic circuit design firm Altium for 8 trillion won.

[Image source=Reuters Yonhap News]

Renesas started in 2002 by spinning off NEC's non-memory business, then became Renesas Technology in 2003 through the integration of semiconductor businesses from Hitachi Ltd. and Mitsubishi Electric. In 2010, it merged with NEC Electronics and changed its name to the current Renesas Electronics.

In 2008, Renesas was the undisputed global market leader in the microcontroller sector, but suffered heavy losses due to the 2011 Tohoku earthquake and other factors, falling out of the world's top 10 semiconductor companies. In 2012, with financial support led by the Japanese government, it underwent restructuring and rebounded as the world's third-largest automotive semiconductor company. Renesas recorded its highest-ever net profit of 337 billion yen last year. Accordingly, Renesas decided on an annual dividend of 28 yen per share in 2023. This marks the first dividend since NEC Electronics paid dividends in March 2005, nearly 19 years ago.

The business segments are broadly divided into automotive, industrial/infrastructure/Internet of Things (IoT), and others (analog semiconductors). In the automotive sector, the company focuses on automotive microcontrollers and system-on-chips (SoCs) that control engines and vehicle bodies, as well as semiconductors needed for infotainment. In the industrial sector, it produces microcontrollers and SoCs used in home appliances and smart homes, industrial automation, social infrastructure, and office automation (OA) equipment. The radiation-hardened (rad-hard) ICs installed on Japan’s unmanned lunar lander ‘SLIM’ are also Renesas products.

Renesas has been actively pursuing mergers and acquisitions (M&A). After acquiring embedded analog semiconductor specialist Intersil for $3.2 billion in 2017, it continued to expand by acquiring IDT, a wireless and sensor analog semiconductor company, in 2019; Dialog, a power, PMIC, and IoT semiconductor design specialist, in 2021; and Reality Analytics, an embedded artificial intelligence (AI) solutions provider, in 2022.

Meanwhile, Altium, which announced its merger with Renesas on the same day, is a software company supplying printed circuit board (PCB) design programs for devices to companies such as Bang & Olufsen and Leica Geosystems, and is considered a global leader in electronic device design. Through the acquisition of Altium, Renesas plans to seek design system efficiency, productivity improvements, and enhance its competitiveness.