Acquiring IDT to build out analogue for cars and data centres (2018)

The paradox of a nationalised company becoming the acquirer

What makes this acquisition interesting is that a company once saved by state support turned, a few years later, into the buyer in a deal worth more than ¥700 billion. Renesas had posted ¥340 billion of losses by 2013 and survived only on INCJ’s investment, then stayed a long time in a shrink-to-profit equilibrium where restructuring squeezed out the earnings. That same company took in Intersil and then IDT back to back and switched to an expansion strategy meant to break it out of the automotive-microcontroller monoculture. The character of the decision is visible in the sheer swing — a company that survived by defending, going on the attack.

Semiconductors are a cyclical industry whose peaks and troughs trade places every few years. String acquisitions together and, when the trough arrives, the burden of the investment and the weakness of the market land at once — which is exactly what caught Renesas in 2019. Shibata did not stop investing for growth, and two years later the pandemic-era supply crunch rewarded him. It was a bet that only works when the nerve to carry acquisition debt through a trough is paired with the stomach not to change course before the next peak: a swing that continued shrink-to-profit would have avoided entirely, and that Renesas chose to take on.