TOKYO -- Japanese automotive chipmaker Renesas Electronics Corp. is considering buying U.S. chipmaker Integrated Device Technology Inc., a person familiar with the matter said on Friday.
The potential acquisition, first reported by the Nikkei, a Japanese business daily, comes as Renesas is beefing up its business in chips for self-driving cars.
The two companies plan to meet next, the Nikkei reported, adding the deal would be worth as much as $6 billion, becoming one of the largest acquisitions for a Japanese chipmaker.
Renesas, second only to NXP Semiconductors NV in automotive market share, generates more than half of its revenue from automotive customers. Last year, the Japanese company paid $3.2 billion for Intersil Corp., a U.S. chipmaker whose product lineup includes semiconductors that manage battery voltage in hybrid and electric vehicles.
An acquisition of Integrated Device Technology, an automotive and network electronics parts-maker, would mark another significant expansion for Renesas. In June, Renesas CFO Hidetoshi Shibata said the Tokyo-based company was planning acquisitions outside of the automotive industry and into fields from health care to aerospace.
Renesas declined to provide immediate comment when contacted by Reuters. Representatives for IDT could not be reached outside business hours.
Craig-Hallum analyst Anthony Stoss said he expects it would take closer to $7 billion for IDT to consider any offer.
Stoss also said he was uncertain if the U.S. government would allow a Japanese company to buy IDT, which has important technology for 5G base stations.
President Donald Trump in March blocked chipmaker Broadcom Inc.'s $117 billion proposed takeover of Qualcomm Inc. on national security grounds, amid concerns that it would give China the upper hand in mobile communications.
Renesas has been reviewing a list of potential acquisition targets amid a wave of mega-mergers in the industry, its CEO has said.
Buying IDT, which has strengths in chips for wireless network devices, could help Renesas enhance its capabilities in developing chips for data communications crucial for self-driving cars.
According to the Nikkei, Renesas plans to buy all IDT shares to take full control of the Nasdaq-listed company.
Renesas was created in 2010 from a merger of NEC Corp.'s chip division and Renesas Technology, which was established through a merger of the chip units of Hitachi Ltd. and Mitsubishi Electric Corp.
Bloomberg contributed to this report.