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  Date: 18/09/2016

Renesas acquiring intersil; a smart move

The world's leading microcontroller chip vendor Renesas was in the top 10 list of semiconductor chips vendors for long time. But now it has slipped a few levels down in the top ranking and also might have lost its number one microcontroller ranking to NXP. Chipmakers are overtaking Renesas through mergers and acquisitions. NXP has acquired Freescale, where the combined microcontroller product revenue has increased significantly, possibly overtaking Renesas. Finally Renesas try the same trick to beat its competitors and gain customers confidence. Renesas decided to acquire a leading analog and power management chip vendor Intersil.

Intersil is a company producing affordable precision analog and power management ICs. Intersil is also into defence and aerospace. And the markets Intersil serves is quite different from other semiconductor vendors. Analog and power management, though a product portfolio in Renesas, but it hardly generates any significant revenue for Renesas. Unlike memory and other logic ICs, analog is steadily growing market and is witnessing a better growth compared to other IC chip categories.

Analog Renesas Intersil

Renesas decision to acquire Intersil is a smart move where it can leverage Intersil strengths in multiple aspects. The gains can be listed as:
1. Getting into the analog and power management market
2. Entry into geographic markets in which Renesas has least presence. A good example is: In the Indian op-amp market, Intersil has a higher share compared to other leading vendors.
3. Increasing its market share significantly in the industrial, and defence and aerospace market.
4. Supporting its microcontroller customers with its own analog and power management devices.
5. Targeting IOT market where microcontrollers, analog, PMICs are heavily used.

What is missing from Renesas compared to other semiconductor vendors in fast growing IOT market is, the IoT specific wireless SoC product portfolio. Also this acquisition won't help Renesas to increase its automotive market share very significantly on immediate basis, but can leverage combine technology to offer new products to the automotive market.

“Renesas is accelerating its focus of resources in automotive, industrial, infrastructure, and the rapidly growing IoT segments to aggressively grow its global business and maintain its position as a leading provider. Intersil’s extensive portfolio of analog and power devices as well as its strength in the automotive, industrial, and broad-based segments complement many of Renesas’ initiatives in these areas,” said Bunsei Kure, Representative Director, President and CEO of Renesas Electronics Corporation. “We believe that this compelling and complementary combination will bring significant synergies and cross selling opportunities as well as system solution proposition which will pave the way for Renesas to strengthen its position as a leader in the global semiconductor market while delivering value to its customers with a unique product offering.”

“Intersil has been part of the industry’s evolution for many decades, carving out key niches and developing core technology that provides tangible benefits over competing solutions,” said Necip Sayiner, President, CEO and Director of Intersil Corporation. “As we’ve embarked on the most recent transformation over the last three years, we have honed the company’s core capabilities and focused them on areas where we are uniquely positioned to solve customer system challenges. The success of that strategy and the ability to improve the quality of the business is what has brought us to this next and exciting phase. We see great potential in combining the Intersil and Renesas portfolios and gaining the scale that will provide a platform for accelerated growth.”
Author: Srinivasa Reddy N
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