Connected car consolidation as Renesas acquires Dialog for €4.9 billion

Japanese automotive electronics giant Renesas is spending big on UK-based Dialog Semiconductor, which specialises in low power embedded chips.

The big idea seems to be to take the combined company to the next level when it comes to connected cars, as well as opening up new IoT markets. Dialog used to rely heavily on Apple for its revenues as it supplied the power management chips for all its mobile gadgets. But it sold that bit of the business to Apple in 2018 and has been busy diversifying ever since.

“The transaction we announced today represents our next important step in catapulting Renesas’ growth plan to achieve substantial strategic and financial benefits, following our previous acquisitions,” said Hidetoshi Shibata, President and CEO of Renesas. “Dialog has a strong culture of innovation along with excellent customer relationships and serves fast growing areas including IoT, industrial and automotive.”

“For several years, we have successfully executed on a diversification strategy that positions Dialog for high-growth,” said Dr. Jalal Bagherli, CEO of Dialog. “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.

“This compelling platform – combined with Renesas’ leading embedded compute, analog and power portfolio – creates even greater growth opportunities in today’s increasingly connected world. The Dialog team is excited to join forces with Renesas. The combined company will be in an even stronger position to provide innovative products for these markets, building on Renesas’ extensive sales, distribution and customer support capabilities.”

This does seem like a fairly complementary acquisition. Renesas is an electronics giant and the Dialog technology should enable it to both consolidate its established markets and compete in new ones. The connected car market looks set to explode with electric cars becoming mainstream and autonomous driving gradually winning people over. There’s even talk of Apple getting into the car market, which these combined companies would appear to be well positioned to help out with.