Technology

Japan-based semiconductor firm Renesas — one of the worldlargest supplier of chips for the automotive industry — is scooping up U.S. chip companyIDT in a$6.7 billion deal that increases its focus on self-driving technology.

Renesas produces microprocessor and circuits that power devices, and automotive is its core focus. It is second only to NXP on supply, and more than half of its revenue comes from automotive. IDT, meanwhile, includes power management and memory among its products, which focus on wireless networks and the converting andstoringof data. Those are two areas that are increasingly important with the growth of connected devices and particularly vehicles which demand high levels of data streaming and interaction.

The acquisition of IDT — which is being made a29.5 percent on its share price — is set to expand Renesas& expertise on autonomous vehicles. The firm said it wouldalso broaden its business into the &data economy& space, such as robotics, data centers and other types of connected devices.

Renesas has already demoed self-driving car tech, which puts it into direct competition with the likes of Intel . Last year, the firm paid $3.2 billion to buy up Intersil, which developstechnology for controllingbattery voltage in hybrid and electric vehicles, and IDT deal pushes it further in that direction.

&Therelittle overlap between their product portfolios, so ita strategically sound move for Renesas. But it does seem like the price is a little high,& said Bloomberg analyst Masahiro Wakasugi.

The IDT deal has been on the table for a couple of weeks after Renesas first revealed its interest in an acquisition last month. It is expected to close in the first half of 2019 following relevant approvals.