Renesas says considering buying US chipmaker IDT

TOKYO: Renesas Electronics Corp is considering buying US chipmaker Integrated Device Technology Inc, the Japanese automotive chipmaker said, as it beefs up its business in chips for self-driving cars and seeks new growth areas.
The deal could be worth as much as $6 billion, making it one of the largest acquisitions by a Japanese chipmaker, the Nikkei business daily reported.
Shares of San Jose, California-based IDT, which makes radio frequency chips used in 4G/5G mobile networks, datacentres and self-driving cars, rose 16.2 per cent to $44 in premarket trading, giving the company a market value of $5.7 billion.
Renesas, second only to NXP Semiconductors NV in automotive chips, said in a filing nothing had been decided, but that it would be prompt in disclosing any decision made. It also said it is seeking the best financing method in the event of an acquisition, should financing be necessary.
Representatives for IDT were not immediately available for comment.
Renesas, which bought US chipmaker Intersil Corp for $3.2 billion last year, has been constantly reviewing its list of potential acquisition targets amid a wave of mega-mergers in the industry, its chief executive has said.
Buying IDT, which has strengths in chips for wireless network devices, could help Renesas enhance its capabilities in developing chips for data communications crucial for self-driving cars.
According to the Nikkei, Renesas plans to buy all IDT shares to take full control of the Nasdaq-listed company.
Craig-Hallum analyst Anthony Stoss said he expects it would take closer to $7 billion for IDT to consider any offer.
Stoss also said he was uncertain if the US government would allow a Japanese company to buy IDT, which has important technology for 5G base stations.
US President Donald Trump in March blocked chipmaker Broadcom Inc’s $117 billion proposed takeover of Qualcomm Inc on national security grounds, amid concerns that it would give China the upper hand in mobile communications. — Reuters