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Analog design asset consolidation continues as Renesas snaps Dialog Semiconductor

Renesas Electronics snapping up Dialog Semiconductor is another testament to analog building blocks’ critical importance in creating a semiconductor giant that aims to cater to 5G, wearable, automotive, smart home, connected medical, and industrial IoT markets. While the Japanese chipmaker’s buying spree resonates with the “innovation by acquisition” model pioneered by Cisco during the 1990s, what is important to note is that all of Renesas’ purchases are analog and mixed-signal outfits.

It all began in 2016 when the top MCU supplier gobbled up Intersil for its power management and precision analog assets. Renesas wanted to combine its MCUs with analog chips handling sensor data and displays to create robust system design solutions.

Two years later, in 2018, Renesas made waves by acquiring another analog and mixed-signal company, Integrated Device Technology (IDT), for its expertise in sensors, actuators, signal conditioning, and motor control design. IDT complemented Renesas’s MCU-centric embedded business with RF, power, and real-time interconnect portfolios.

Now, coming back to Dialog Semiconductor, which Renesas has acquired for euro 4.9 billion, specializes in power management and wireless connectivity. A day before the deal was announced, Bloomberg News reported that Dialog was also holding discussions with STMicroelectronics, but Renesas outbid the Franco-Italian chipmaker. Dialog’s CEO Jalal Bagherli acknowledged that multiple parties were interested in acquiring the Anglo-German chip designer.

Figure 1 While commonly known for its power and battery management prowess, Dialog has also been focusing its mixed-signal ICs on connectivity applications for the IoT era. Source: Dialog Semiconductor

Things had been warming between the two chipmakers for some time. In August 2020, Dialog announced to become a preferred power solutions provider to Renesas’s R-Car automotive platform. Here, Dialog’s highly programmable power management ICs (PMICs) would complement Japanese chipmaker’s automotive SoCs to beef up the system-level designs.

It’s worth mentioning that Dialog has also acquired the Silicon Valley-based analog design house Silego Technology in 2017 to boost its power management credentials. Silego’s configurable mixed-signal ICs (CMICs) integrate multiple analog, logic, and discrete component functionality into a single chip. The intuitive CMIC software interface allows designers to configure functions and prototype a custom IC within hours.

Figure 2 The mixed-signal platform CMIC enables engineers to configure design requirements on the fly. Source: Dialog Semiconductor

Now, Renesas will sit on all these analog design resources, which also include battery management, power conversion, LED drivers, and wireless charging. Dialog’s Bluetooth low energy (BLE), Wi-Fi, and audio system-on-chips (SoCs) can also complement Renesas’s MCU-based solutions.

Dialog, headquartered near London and listed in Frankfurt, will be the second UK-based semiconductor firm to come under regulatory scrutiny after Nvidia announced to buy Arm last year.

The Japanese chipmaker has come a long way after being established in 2003 as a joint venture between the semiconductor operations of Hitachi and Mitsubishi Electric. Then, in 2010, this chip outfit called Renesas Technology merged with NEC’s semiconductor operations called NEC Electronics. The new company was named Renesas Electronics.

Renesas isn’t alone in amassing the analog assets. ADI first snapped Linear Technology and then announced the acquisition of Maxim Integrated. Likewise, Microchip has been assembling analog assets, first through its 2015 purchase of Micrel and then the 2018 acquisition of Microsemi.

What’s clear is that analog assets—ranging from power management to RF to data conversion—are in high demand and digital players want to own them to create powerful system-level design solutions. The analog plus power plus embedded processing is going to accelerate the design cycles and lower the design cost.

At the same time, however, analog specialists like ADI are buying assets to reduce the operational costs. Both ways, the analog design world is consolidating at an incredible pace. So, the analog design work will likely be torn between platforms developed at large semiconductor outfits and pockets of innovation occurring at a new breed of analog startup firms.

The industry forces are realigning to get ready for the next big things in electronics—5G, electric vehicles, and IoT—and this analog design consolidation is a harbinger of the upcoming design waves. Will there be an opportunity for analog upstarts to carve out design wins in this rapidly shifting landscape? Time will tell, but the fact that Scalinx, a supplier of data conversion chips, which has secured euro 10.5 million funding, shows that startups will be part of this great analog play.

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