Insight Bite: Renesas seeks diversification with Dialog play

As the automotive industry struggles with a global chip shortage, Reading-headquartered chip supplier Dialog is being acquired by the world’s largest automotive semiconductor maker: Renesas Electronics.

Dialog and Renesas have been working together for over a decade, and the $6bn cash deal will see the Tokyo headquartered Renesas absorb Dialog’s extensive portfolio of wireless communication products. This is focused on low-power embedded chips, and includes the transceivers used by Apple for the latest 5G iPhones.

Renesas, which also supplies Apple, is expected to use this portfolio to both consolidate control in the automotive market and expand beyond it. Many of Dialog’s chips are critical to the emerging generation of electric and connected vehicles. Applications include low-power connectivity solutions for auto interiors, driver assistance, climate control, security, and battery management. Beyond the automotive sector, Dialog’s low-power connectivity chips could also help Renesas better serve the industrial IoT market and diversify into 5G.

“We have built a strong foundation of high-performance analog and power efficient mixed-signal expertise, extended our product portfolio and applied our technologies into markets including 5G, wearables, automotive, smart home, connected medical and industrial IoT” said Dr. Jalal Bagherli, CEO of Dialog. “This compelling platform – combined with Renesas’ leading embedded compute, analog and power portfolio – creates even greater growth opportunities.”

Renesas, which has ramped up prices and production amidst a global shortage of automotive chips, will now be well-positioned to serve demand from the emerging connected cars market. This looks set to explode as electric and autonomous cars become standard in the coming decade.

In the past year, several other chip manufacturers have used acquisition to get stronger footholds in this growing market. Analog Devices’ cited automotive strength as one reason for its acquisition of Maxim for $21 billion in July 2020, and Nvidia’s proposed $40 bn acquisition of ARM would complement its autonomous vehicle initiatives – if the deal is approved.

Oliver Markl, Managing Partner for the DACH team at Acuity Advisors commented,

“We have gotten to know the Dialog team well when they acquired Creative Chips. This deal helped them strengthen their capabilities in mixed signal and also improved their access to the German Mittelstand industrial base. Together with Renesas they are now very well positioned to capture substantial value in the future – as anyone who has invested in Dialog a bit over 10 years ago will attest to.”

Oliver Markl, Managing Partner

About Acuity Advisors

We know technology and are experts in selling businesses, securing equity investments and raising debt finance. Our partners are senior players: skilled at getting to the heart of a technology business, understanding what will attract buyers and investors, and building long-lasting relationships. We have an unrivalled understanding of the industry’s complexities and personalities – our track record and client feedback are compelling evidence of that. We’re an international firm – most of our deals are cross-border, from offices in London, Vienna, Shanghai and Silicon Valley – but we’re grounded in our approach. We move quickly when it’s needed, and we’re around for the long haul when patience is a virtue. We’ve maintained a very high success rate across hundreds of deals while keeping our focus on doing what’s right for our clients. From first meeting to successful exit, we earn the trust that clients and investors put in us. Learn more here.

© 2021 Acuity Advisors Limited

A conversation is never wasted. We’re confident that we can give you all the help you need, but we’ll tell you if we think there’s a better option for you.

Get in Touch Get in touch now