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.