Acquisitions often go wrong. Renesas Electronics has acquired three major players in a short period of time, but according to Dr. Sailesh Chittipeddi, Executive Vice President, and General Manager of Renesas Electronics' IoT and Infrastructure Business Unit (IIUB), all of them have been successful.
Markt & Technik: Intersil was acquired in 2017, IDT in 2019 and Dialog Semiconductor in 2021. Were all the acquisitions able to meet expectations?
Dr. Sailesh Chittipeddi: You can probably never say that the integration of one company into another went perfectly, but I am convinced that we did all three acquisitions very well in terms of our product portfolio. The integration of the business units went as planned and we see synergies in terms of sales. In terms of potential cost savings, we even exceeded our own expectations. At Dialog, it is still a little early to judge the extent to which the revenue and cost synergies that have been set can be realized. But all the indicators suggest that it will work well here, too.
Where do you see the biggest benefits of the Dialog acquisition for Renesas?
In the automotive area, Dialog can help on the PMIC’s, display drivers and connectivity. One example is Dialog's BLE technology for tire pressure sensors. Here we will bring Winning Combinations to the market. However, the acquisition of Dialog brings many more benefits to IIBU. Look at the industrial area, for example, the CMICs, i.e., the configurable mixed-signal ICs, are an excellent fit here, but I/O-Link or Dialog's non-volatile memory and ReRAM products are also needed in this segment. In the IoT area, Dialog's ULP-BLE (Ultra Low Power Bluetooth Low Energy), low-power Wi-Fi and AC/DC components are again very beneficial for our business.
In terms of connectivity, the acquisition is a very obvious advantage, because Renesas did not really have a strong connectivity portfolio until now. With Dialog, we now have access to important technologies such as Wi-Fi 4 or BLE, but even more important is Dialog's low-power know-how, a point that is particularly important in the industrial environment. Because now we can offer the sensors and a low-power connectivity solution, that makes a huge difference on the business side. In addition, Dialog is a well-known supplier of power management ICs. Intersil was particularly active here in the power area for laptops, etc., up to data centers. With Dialog, we can now also cover the mobile sector and here Dialog is clearly the technological leader. Dialog did have to give up business with its largest customer in this area, but this only involved power management for application processors. Other areas for investment, such as powering the displays or battery management, were not affected. Dialog's CMICs are also very interesting components in the mobile sector.
We have been focused on the IoT for a long time, but so far more with our MCUs or energy harvesting devices, less with power management. With Dialog, we can now also cover this area, and I believe that we will discover even more synergies that we haven't even considered yet.
Does that mean Renesas will hold on to the mobile phone business?
Yes, although I would like to emphasize quite clearly that our focus will be on the power management business - we will definitely not develop application processors or connectivity solutions in this area. This approach is similar to our approach in the infrastructure area. Here, we focus on complementary solutions with the processors or the DIMM modules. Similarly, we work with the most important customers in the mobile sector and take care of battery charging, FGIC, power management for displays, capacitive dividers, etc.
When Renesas bought Intersil or IDT, there was hardly any overlap, but it is different with Dialog...
Dialog definitely has IP that we didn't have. One example: We are active in wireless power technology, but what we have lacked so far is capacitive voltage dividers. Dialog, on the other hand, has some of the best technology around, and for higher power levels needed on several phone models, this technology is indispensable. Now we at Renesas no longer have to rely on third-parties, but have this technology in-house. The same applies to battery-charging ICs, where we have only been marginally represented up until now, but Dialog has precisely the technologies that are needed in this area. When it comes to custom PMICs, Dialog also has significantly more know-how than Renesas. We were not represented at all in the area of low-power for displays, a technology that plays an important role in mobile phones. The same is true for many IoT devices, of course. In addition, Dialog's AC/DC expertise in the consumer sector complements our own know-how. In order to be able to use this concentrated knowledge in the power management area, we have combined all activities in a single business in order to be able to develop an integrated strategy.
Another example of how the Dialog acquisition helps: In the industry segment, the acquisition of S3 and Adesto by Dialog benefits us because we now have access to very interesting ADC and DAC IP, so that we no longer have to buy from outside in this case either.
So, there's not too much overlap?
No, the overlaps are really not large. In the area of power management, I would say that there is no overlap at all. Even though it is still a bit early at the moment to predict the sales trajectory that is possible as a result of the Dialog acquisition, but I am absolutely certain that we have secured enormous growth opportunities with it.