It would be the latest in a trend of consolidation among global chipmakers.
Japan’s Renesas Electronics is in the final stages of negotiations to acquire U.S. chipmaker Intersil for as much as 300 billion yen ($2.99 billion), an industry source familiar with the deal said on Monday.
An agreement on the deal, which would be the latest in a trend of consolidation among global chipmakers, was likely to come “soon,” said the person, who was not authorized to discuss the matter and thus asked not to be named.
Renesas said in a statement it was considering various options to grow, including a deal with a U.S. chipmaker, but that nothing had been decided.
Renesas shares rose as much as 4.2% in early morning trade before closing down 3.1%.
Some investors have doubts about how much the deal could boost Renesas’s profits, said Gavin Parry, managing director of Parry International Trading in Hong Kong.
Renesas Chief Financial Officer Hidetoshi Shibata told in an interview late last year that the company had earmarked billions of dollars for acquisitions to defend an industry lead under threat from merging peers. He noted that Renesas had over 300 billion yen in cash to fund potential acquisitions.
Intersil had a market capitalisation of more than $2.1 billion as of Friday. Renesas will add a premium to buy Intersil, seeking to take full control of the Milpitas, Calif.-based company.
Renesas plans to use cash on hand and may also consider borrowing funds from banks, the Nikkei said, adding that the deal could be reached as early as this month.
Slowing growth in computers and smartphones—the traditional mainstays of the industry—fueled a wave of mergers last year, with chipmakers turning to areas such as auto electronics for sales growth.
Demand for cheaper chips and new products to power internet-connected gadgets has also driven consolidation in the industry.