“Mergers And Acquisitions Will Always Happen No Matter What”

- Advertisement -

Why are we witnessing so many acquisitions in the semiconductor space? As Renesas forges ahead, leveraging cutting-edge technologies through strategic acquisitions, one wonders if Indian firms can look forward to this trend as well. We got lucky when EFY’s Yashasvini Razdan got to speak to Sailesh Chittipeddi, Renesas, who has been in leading positions through many mergers and acquisitions. Here are the excerpts…

Sailesh Chittipeddi, Renesas

Q. There’s been a boom in AI, ML, and IoT in recent years, and now, with the introduction of ChatGPT, how do you think this boom will affect the semiconductor space?

A. We are still in the early stages, and over the next several years, we will start to see the benefits of this boom in the semiconductor industry. The migration of predictive AI and training models from the cloud to the edge will also happen for generative AI, including ChatGPT.

Initially, these technologies will mainly benefit cloud-based companies, but as we simplify the data requirements for smaller workloads using ‘pruning’ we can move closer to edge and endpoint. Once that happens, we will witness an acceleration of AI implementation in the endpoint or edge.

Q. The semiconductor space has experienced numerous mergers and acquisitions. How do you see these mergers and acquisitions benefiting the industry amid the global market uncertainty?

A. Mergers and acquisitions will always happen no matter what, for reasons such as scaling, filling technology gaps, or addressing financial concerns. In the semiconductor industry, mergers and acquisitions have been driven by the need for scale and strategic goals in one’s portfolio.

- Advertisement -

While the industry is currently experiencing a cyclical downturn, the long-term outlook remains bright due to transformative trends like IoT, AI, electrification, and Industry 4.0. These trends will continue to shape the industry and drive mergers and acquisitions.

Q. How does a company identify a potential target for acquisition?

A. Financially, we evaluate the industry across four end-market pillars—infrastructure, IoT, industrial, and automotive. We assess which segments within these align with our competencies and identify any gaps in our capabilities.

However, if developing the required technologies internally would take an extensive amount of time, it makes more sense to consider an acquisition. The decision depends on the time it would take to achieve long-term success and whether acquisition offers a quicker route.

Our acquisition of Panthronics exemplifies our strategy of harnessing existing technologies rather than investing significant time and resources into their development. Established players like NXP Semiconductors and STMicroelectronics have dedicated over a decade to Near-field Communication (NFC) technology, and attempting to match their progress would be a painful exercise, and there’s no guarantee of success. Panthronics, on the other hand, possessed a differentiated NFC technology that aligned with our goals, and which we could utilise to the maximum, so we went ahead and acquired it.

Similarly, in the case of Wi-Fi, starting from scratch would have entailed a lengthy process, potentially spanning a decade. To speed up things, we opted to acquire Celeno Communications in 2021, for the simple reason that internal development would take too long.

Q. What are the potential challenges that companies face during an integration process, and how do you deal with them?

A. The primary challenge during integration is to support existing customers while scaling up the business. Fortunately, in most of our acquisitions, we have already worked with the companies for a significant period.

For example, with Panthronics, we collaborated for close to five years, field-tested their products, and have confidence in their performance. In general, successful execution determines how well you end up in the marketplace.

Q. What will be the impact of the acquisition of Panthronics on the existing customers of both Renesas and Panthronics?

A. Renesas offers smaller companies like Panthronics the opportunity to scale up rapidly by leveraging their sales channels and marketing communications.

On the other hand, Panthronics would give us an ability to close the technology gap in short-range, lower-data-rate communication. It enables us to pursue new markets such as mobile POS (point of sale), keyless entries, NFC charging, and more. These capabilities complement our existing portfolio and bridge technological gaps.

Q. Do you see giants like Renesas acquiring Indian companies in the semiconductor space?

A. We acquired Steradian Semiconductors, a fabless semiconductor company based in Bengaluru, that provides 4D imaging radar solutions for its radar capabilities in October last year. We saw something differentiated in their technology that gave us a credible advantage in the marketplace.

Renesas focuses on talent, the right people, and closing technology gaps—regardless of geographical location. We are open to acquisitions in all regions in the world where it makes strategic sense.

Q. Prime Minister Modi aims to make India a global electronics manufacturing hub by 2030. How can this growth be accelerated?

A. It’s a good question. I’ve had this discussion with the Union Minister of State for Electronics and Information Technology, Rajeev Chandrasekhar-ji as well. India needs to establish a robust electronics manufacturing services (EMS) ecosystem. The government’s efforts in this direction have already attracted major companies to manufacture in India.

I think once the EMS ecosystem starts expanding, the manufacturers would need to buy components in the Indian market. Strengthening the value chain and increasing domestic production will accelerate growth.

Q. What is Renesas’ long-term plan for growth in India and globally? What milestones are you aiming to achieve?

A. Renesas focuses on several key growth elements such as AI, IoT, robotics, and sustainability. On the automotive side, we see a significant growth area in the electrification of vehicles.

Sustainability is a globally pervasive trend across industries. Many industries are now migrating to more automated robotic situations to drive sustainability. Industry 4.0, AI in infrastructure, IoT, and secure environments also contribute to growth. Our objective is to gain and sustain the market share by accelerating our efforts in these areas and outperforming the competition.

- Advertisement -

Most Popular Articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here
Captcha verification failed!
CAPTCHA user score failed. Please contact us!

Exclusive

Union Budget 2024-25: What Can The Electronics Sector Expect?

0
Focusing on localisation in the electronics ecosystem, the first Union Budget post-elections has revamped customs duties on raw materials and equipment, extending support for...

“ST SiC Optimises The Performance Of EV Applications”

0
STMicroelectronics plans to introduce Silicon Carbide (SiC) and Gallium Nitride (GaN) for the electric vehicle ecosystem in India. In an interview with Francesco Muggeri...

Electric Construction Machines Forecast $126 Billion Market Growth

0
IDTechEx's report on electric construction machines aims to boost industry growth, forecasting a US$126 billion market by 2044 with ongoing advancements in technologies and...

Buzz

Ahamani EV Technology Seeks Tech Sharing With Indian Auto Giants

0
The company has created significant intellectual properties, such as improvements in battery technology, motor design, powertrain systems, and anti-theft monitoring mechanisms. Ahamani EV Technology Co.,...

Electric Construction Machines Forecast $126 Billion Market Growth

0
IDTechEx's report on electric construction machines aims to boost industry growth, forecasting a US$126 billion market by 2044 with ongoing advancements in technologies and...

Quantum Energy To Increase EV Production By 8x In FY25

0
The electric two-wheeler manufacturer based in Telangana has ambitious expansion plans for this year, aiming to increase its production from 6,000 units last year...

Important Sectors

Union Budget 2024-25: What Can The Electronics Sector Expect?

0
Focusing on localisation in the electronics ecosystem, the first Union Budget post-elections has revamped customs duties on raw materials and equipment, extending support for...

“ST SiC Optimises The Performance Of EV Applications”

0
STMicroelectronics plans to introduce Silicon Carbide (SiC) and Gallium Nitride (GaN) for the electric vehicle ecosystem in India. In an interview with Francesco Muggeri...

Ahamani EV Technology Seeks Tech Sharing With Indian Auto Giants

0
The company has created significant intellectual properties, such as improvements in battery technology, motor design, powertrain systems, and anti-theft monitoring mechanisms. Ahamani EV Technology Co.,...

Quantum Energy To Increase EV Production By 8x In FY25

0
The electric two-wheeler manufacturer based in Telangana has ambitious expansion plans for this year, aiming to increase its production from 6,000 units last year...

IndianOil And Indian Navy Sign MoU For Hydrogen Fuel Cell Tech In Heavy-Duty E-Mobility

0
IndianOil partners with the Indian Navy to launch an innovative green hydrogen fuel cell bus, marking a major leap towards sustainable heavy-duty transportation solutions. In...

Manufacturing

Union Budget 2024-25: What Can The Electronics Sector Expect?

0
Focusing on localisation in the electronics ecosystem, the first Union Budget post-elections has revamped customs duties on raw materials and equipment, extending support for...

India’s Roadmap To Becoming A Global Leader in Electronic Manufacturing: Policies, Progress, And Prospects

0
India's electronic manufacturing sector is poised for significant growth in the coming years, driven by ambitious government initiatives and strategic economic policies. Currently employing...
Mother-board-electronic-components

MeitY Announces $350 Billion PLI Plan To Boost Electronics Sub-Assemblies

0
MeitY announces allocation of $350 billion for a new PLI scheme, aiming to make India a global hub for electronics components and boost exports...

NITI Aayog Report Urges To Boost Electronics Global Value Chain

0
Aiming for the country to become a global hub for electronics manufacturing, the recent report by NITI Aayog called for interventions, analysing India’s position...

HPL Electric Teams with G Ramway To Make Relay Switches

0
Eyeing India’s self-sufficiency goals, smart meter manufacturer HPL Electric has inked a deal with China-based G-Ramway Technology to boost local manufacturing off switches. Last week,...