FILE PHOTO: Renesas Electronics Corp's logo is seen on its product at the company's conference in Tokyo, Japan, April 11, 2017. REUTERS/Toru Hanai/File Photo
Leading auto parts manufacturer has increased its stake in chip manufacturer Renesas Electronics by making an investment to the tune of USD 800 million. As an outcome of the deal, Denso would be increasing its stake in the company by 4.5 per cent. Denso is making this strategic move in the wake of the growing demand for autonomous and other technology which require the use of chips.
Denso is an affiliate company of Toyota Motor Corporation and also supplies its products to Toyota. The company has been recently increasing its investment in research and development related to new technologies like autonomous driving technology and connected car technology. Last month, Denso had acquired a stake in the cybersecurity firm, Dellfer.
Denso is acquiring the stake in Renesas from Innovation Network Corp of Japan (INCJ), a company backed by the Japanese government which has a 50.1 percent stake in Renesas. The financial details of the deal were not divulged, but based on market rates, the deal is worth about 85 billion yen ($796.9 million) based on Renesas’ share price. After the acquisition, Denso’s stake in Renesas will increase to 5 per cent while INCJ’s stake will decrease to 45.6 per cent.
With the focus in the automotive industry shifting to electric vehicles, connected car technology and autonomous driving technology, automotive manufacturers and parts manufacturers are vying with each other to develop new technologies. This new trend will increase the dependence on chips and software for innovative features in modern day vehicles.
Denso said in a statement that it is important for OEMs to enhance their collaboration with semiconductor manufacturers who have experience and expertise for the development of vehicle control systems in automated driving and other new fields.
Toyota also has plans for a new USD 2.8 billion company that it would form in partnership with Denso and another supplier named Aisin Seiki Co for the development of automated-driving software.
Hamid Moaref has always been fascinated by cars and the automotive industry. His family has a longstanding association with the industry and has been in the tire business for the past 35 years. Raised in Dubai, Hamid attended Capilano University in Vancouver where he graduated with a BBA in marketing before attending an intensive course in magazine publishing in 2005. He has been the publisher and chief editor of Tires & Parts magazine for the past ten years.
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