TOKYO – Renesas Electronics plans to acquire printed circuit board electronic design company Altium and gallium nitride power device maker Transphorm with a third major acquisition reportedly in the works, the latest big moves by Japan’s largest integrated semiconductor device maker.
These and previous acquisitions are key to the company’s drive to build a large, profitable and globally competitive semiconductor business spanning automotive, industrial, infrastructure, Internet of Things (IoT), cloud computing, data center and space and defense applications.
In combination with the rationalization of existing operations, the moves to date have been profitable. Since 2016, the company’s consolidated sales have increased by 2.3 times to 1.5 trillion yen (US$9.8 billion) while operating profit margin has risen from 11.0% to 26.6%.
Renesas is a world leader in microcontrollers for the auto industry and also possesses embedded processing, analog, power management, radio frequency, sensor, system-on-chip (SOC) and other semiconductor technologies.
It has its own front-end wafer fabrication capacity in Japan, and some in Florida, but also outsources production to Taiwan’s TSMC and Global Foundries. Its back-end assembly, packaging and test operations are located in Japan, China and Malaysia.
On January 11, Renesas announced the purchase of 100% of Transphorm, an American producer of gallium nitride (GaN) power semiconductor devices with more than 1,000 related patents. The acquisition is likely to be completed in the second half of 2024.
GaN is expected to be the next widely used power semiconductor material after silicon carbide (SiC). Both have applications in electric vehicles (EVs), data centers, renewable energy and industrial power conversion.
Renesas, which signed a 10-year SiC wafer supply agreement with Wolfspeed last summer, plans to start mass production of SiC power devices in 2025. Wolfspeed is the world’s leading producer of silicon carbide wafers.
On February 15, Renesas announced the 100% purchase of Altium, a developer of PCB electronic design software, a deal that is scheduled to close in the second half of 2024. Altium, which pioneered this technology, was established in Australia in 1985 and moved its headquarters to the US in 1991.
The acquisition will facilitate the design and integration of Renesas embedded microcontrollers, analog, power management and network devices, a process that is becoming increasingly complicated.
The plan is to create an “electronics system design and lifecycle management platform” open to third-party vendors using Altium’s cloud computing system for efficient collaboration across component, subsystem and system-level design.
In Japan, Altium competes with Zuken while worldwide it competes with SolidWorks, Autodesk, Synopsis, Cadence Design, Shanghai Tsingyue and several other companies. Collaboration with Renesas should make Altium more competitive and vice versa.
On February 20, Renesas extended the expiration date of its tender offer to acquire all the shares of Sequans Communications to March 4. Sequans is a designer of telecom integrated circuits (ICs), transceivers and modules headquartered in Paris. Its 5G/4G solutions are optimized for massive broadband Internet of Things (IoT) applications.
Sequans’ target markets include industrial sites, logistics, enterprise routers, networked vehicles, smart city services, electronic healthcare services and smart homes – in short, almost everything but smartphones. Sequans has worked with telecom carriers Verizon, AT&T, Sprint, T-Mobile, NTT DoCoMo and KDDI.
Since 2017, Renesas has completed seven acquisitions, greatly accelerating its technological advance and penetration of diverse markets while boosting sales, profits and profit margins.
Intersil, a US provider of power management and analog semiconductor devices, was the first of these acquisitions. The two companies’ products are complementary and, like Renesas, Intersil has a strong presence in automotive and industrial markets.
Intersil also makes radiation-tolerant ICs for space and defense applications, from low-earth orbit to the Mars Perseverance rover. These devices are made in Florida.
Spirit Electronics, an IC distributor and test service provider headquartered in Arizona, writes that nearly every satellite in space has a Renesas component on board.
In 2019, Renesas acquired Integrated Device Technology (IDT), a US supplier of analog and mixed-signal (analog and digital on the same chip) ICs and sensors for the communications, computing, consumer, automotive and industrial markets.
This was followed by the acquisition of Dialog Semiconductor and Celeno Communication in 2021. Dialog Semiconductor is a UK-based provider of battery and power management, Wi-Fi, Bluetooth short-range wireless and IoT devices. Celeno is an Israeli provider of Wi-Fi chipsets and software for home and corporate networks, autos, smart buildings and factories.
In 2022, Renesas acquired Reality AI and Steradian. Reality AI is a US developer of software for non-visual sensing in automotive, industrial and commercial environments. Its signal processing, machine learning, monitoring and anomaly detection software enhances the performance of Renesas processors.
Steradian is an Indian semiconductor design company that specializes in 4D imaging radar solutions for automotive, industrial, home security and other applications. 4D radar uses echolocation and time-of-flight measurement to track moving objects.
These are combined with Renesas SoCs for Advanced Driver Assistance Systems (ADAS). The acquisition complements the partnership established by Renesas and India’s Tata Motors and Tejas Networks in 2022.
Last year, Renesas acquired Panthronics, an Austrian semiconductor design company specializing in near-field communications (NFC) chipsets and software. NFC is a short-range technology that enables wireless connections between electronic devices within a few centimeters. Examples include card readers, cell phone payments, boarding passes and wristband healthcare monitoring.
All in all, the acquisitions have transformed Renesas into a truly multinational company. About half of the members of its senior management team are from acquired companies and more than half of its employees are foreign.
Executive meetings are generally held in English while its outside directors have worked overseas, many with foreign companies. CEO Hidetoshi Shibata, formerly executive managing director of Innovation Network Corporation of Japan (INCJ), a Japanese sovereign wealth fund, has an MBA from Harvard Business School.
The Japanese semiconductor industry is not, as it is often portrayed (especially by the Japanese), a failing enterprise desperately seeking its last chance in tie-ups with TSMC and IBM. On the contrary, it is the highly integrated, second-largest piece of the global semiconductor industry, with Renesas at its fast-expanding core.
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