Renesas Electronics CEO Hidetoshi Shibata. — Bloomberg
Tokyo: A decade ago, Renesas Electronics Corp was under government control and bleeding cash.
Now worth US$35bil, the Japanese chipmaker is targeting a market value of around US$100bil by 2030, thanks to a string of overseas acquisitions.
Behind those deals is former Merrill Lynch banker Hidetoshi Shibata. Five years into his tenure as chief executive officer, the 51-year-old sees new business in India and in artificial intelligence-enabling microcontrollers helping the company double annual revenue to a record US$20bil by the end of the decade.
His ambition to triple the company’s valuation to 16 trillion yen to 17 trillion yen comes as a fresh surge in artificial intelligence (AI) enthusiasm lifts shares of the chipmaker behind Toyota Motor Corp, Honda Motor Co and Nissan Motor Co to their highest since the global financial crisis.
Formed out of the chip arms that originated from NEC Corp, Hitachi Ltd and Mitsubishi Electric Corp, Renesas in 2009 was the world’s No. 3 chipmaker in sales after Intel Corp and Samsung Electronics Co.
But its fortunes faded alongside its Japanese clients. In addition, damage to a key factory in the March 2011 Japan quake prompted automakers to cut their exposure to any single supplier, and Renesas soon ceded ground to rival NXP Semiconductors NV.
Since joining the company as chief financial officer in 2013, Shibata’s orchestrated a string of acquisitions. This year, Renesas announced a US$6bil deal to buy Australia-listed software firm Altium Ltd to move upstream in product development and electronics design.
In 2021, the company acquired Britain-based Dialog Semiconductor Plc for US$6bil and earlier bought San Jose-based Integrated Device Technology Inc and Milpitas, California-based Intersil Corp, in part to expand beyond the automotive sector into data centres and consumer devices. Shibata also expressed interest in compound semiconductors, which remain popular among electric vehicle (EV) makers.
“We need to be a real global player,” Shibata said in an interview last month. “It’s meaningless to be a major player in Japan. We have to be at the top, globally. I want to make that happen.”
His buying spree has helped reduce Renesas’ reliance at home and expand abroad. Japan accounted for 26% of total sales last year, down from 44% in 2016. Sales to other Asian countries and Europe and North America have all increased during the same period.
India, which currently accounts for only a fraction of Renesas sales, will be important to future growth, according to Shibata. The company aims to earn at least 10% of revenue from the South Asian nation by the end of this decade, betting on that market’s fast-growing needs for electronics. — Bloomberg
