Renesas Electronics, a leading Japanese chip manufacturer, has announced its strategic move into the digital device design space through the acquisition of Australian-based Altium for $5.9bn.

The acquisition propels Renesas into a prominent role in Japan’s chip industry, aligning with the government’s initiatives to fortify the nation’s technological capabilities and supply chain robustness against geopolitical uncertainties.

Renesas, known for producing chips for leading automakers like Toyota, aims to diversify its offerings by providing device design capabilities through the integration of Altium‘s digital tools.

Altium specialises in providing engineers and designers with tools for devising circuit boards.

The deal has received approval from both companies’ boards of directors, yet it awaits the green light from Altium shareholders, an Australian court, and regulatory bodies. Renesas anticipates the completion of the acquisition in the second half of the year.

Renesas joins the ranks of Japanese companies expanding overseas, following recent announcements by Nippon Steel.

Renesas’ history includes a successful turnaround under a government-backed fund, marked by strategic acquisitions such as the $3.2bn deal for chipmaker Intersil in 2016 and the $6.7bn purchase of Integrated Device Technology in 2018.

Last month, the chipmaker revealed plans to acquire US power semiconductor company Transphorm Technology for $339m.

An increase in AI interest is significantly boosting the semiconductor industry with digital logic, sensors and analog seeing the biggest growth. 

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GlobalData predicts that the global conversational AI platforms market will be worth $37.8bn in 2030, up from $7.1bn in 2022 at a CAGR of 23.3%.   

This market growth will have a direct impact on semiconductor manufacturers who will continue to meet growing demand. In a 2023 GlobalData survey, around 54% of respondents answered that their businesses are already being disrupted by AI.