The shares in the Japanese chip company climbed as much as 4.2 percent to 640 yen as of 9:08 a.m. Monday.
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Japanese chipmaker Renesas Electronics is considering acquiring US rival Intersil as one of the several potential paths it could take for growth, it said following a news report saying the two companies are in final talks to strike a deal worth as much as ¥300 billion ($2.98 billion).
Renesas Electronics said in a statement that it is looking at various options including an Intersil purchase but said no final decision has been made. A spokeswoman for Intersil declined to comment.
Some investors have doubts about how much the deal could boost Renesas’s profits, said Gavin Parry, managing director of Parry International Trading Ltd in Hong Kong. Past year the company revealed that it had allocated several billion dollars for possible acquisitions. He noted that Renesas had over 300 billion yen in cash to fund potential acquisitions. Intersil’s stock has climbed 23 percent this year, and its market value is now at $2.1 billion.
The Nikkei Asian Review reported earlier Monday that Renesas is in final negotiations to acquire Milpitas, California-based Intersil, without saying where it got the information.
Slowing growth in computers and smartphones – the traditional mainstays of the industry – fuelled a wave of mergers a year ago, with chipmakers turning to areas such as auto electronics for sales growth.
Worldwide semiconductor M&A topped $80 billion past year, Thomson Reuters data showed.
Renesas Electronics, which has undergone restructuring of its unprofitable operations, is now aiming to bolster its automotive chip business amid expected growth in demand for automotive devices worldwide.
Renesas was the market leader for automobile chips until 2014 but has dropped to the third place since.
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The Japanese company lost its second-place spot after Dutch rival bought USA chipmaker Freescale Semiconductor Ltd in a $12 billion deal in December.
