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Allegro MicroSystems Rejects Onsemi’s $6.9 Billion Takeover Offer

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Allegro MicroSystems (ALGM.O), a semiconductor solutions provider, has rejected a $6.9 billion takeover offer from Onsemi (ON.O), deeming the proposal “inadequate.” Onsemi’s offer of $35.10 per share, made public on Wednesday, was seen as insufficient by Allegro’s board, which had previously turned down an offer from Onsemi priced at $34.50 per share.

Allegro, based in New Hampshire, confirmed it had received the offer in February and after careful review, decided to reject it. The company did not elaborate further on the rejection. Onsemi, for its part, did not respond to requests for comment on the matter.

Onsemi’s bid came as part of its strategy to weather the ongoing slump in automotive chip demand, but Allegro, which supplies power management systems for both electric vehicles (EVs) and traditional vehicles, is expected to avoid the same market weakness. Allegro has also recently appointed Mike Doogue as CEO, with expectations that the company will return to revenue growth following nearly five quarters of decline, according to data from LSEG.

Onsemi had planned to fund the acquisition through a mix of committed financing, cash, and a revolving credit facility. The offer represented a 31% premium over Allegro’s closing stock price on Wednesday. Allegro’s shares had surged 22% earlier in the week following reports of Onsemi’s interest in a takeover.

With a market capitalization of approximately $4.93 billion, Allegro remains an attractive target for potential acquirers despite rejecting the current offer.

Renesas to Cut Less Than 5% of Global Workforce Amid Sluggish Chip Demand

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Renesas Electronics, a Japanese chipmaker specializing in automotive semiconductors, has announced plans to reduce its global workforce by less than 5%, which translates to fewer than 1,000 jobs. The decision comes as the company faces weaker-than-expected demand for its chips. Renesas, whose clients include major automakers Toyota and Nissan, also revealed that it would cancel planned salary increases for employees, including executives, scheduled for this spring.

Although the company did not specify the exact number of job cuts, it stated that the layoffs were aimed at improving its ability to execute its long-term growth strategy, particularly in light of ongoing market softness. Renesas is known for its automotive chips but is also working to diversify its business. In February, the company announced plans to acquire electronics design firm Altium for $5.9 billion as part of its efforts to broaden its portfolio.

Renesas’ shares dropped by 3% during Tokyo trading on Wednesday, reflecting investor concerns over the company’s response to the current market conditions.

 

Bosch and Tenstorrent Forge Partnership to Standardize Automotive Chip Development

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German industrial powerhouse Bosch is joining forces with U.S. chip startup Tenstorrent to spearhead an initiative aimed at standardizing the building blocks of automotive chips. This partnership is set to revolutionize the way modern vehicles are powered and controlled, addressing the growing complexities of automotive electronics. According to Tenstorrent executives, the collaboration will focus on creating a standardized methodology for utilizing “chiplets,” a modular approach that allows for flexibility and efficiency in chip design.

Chiplets, which are small, self-contained units of silicon that can be combined in various configurations, represent a significant advancement in semiconductor technology. By developing a standardized platform for these chiplets, Bosch and Tenstorrent aim to create systems capable of meeting the diverse and evolving needs of modern vehicles. David Bennett, Tenstorrent’s chief customer officer, emphasized that the goal is to enable the automotive industry to rapidly adapt to new technologies, such as electric vehicles and autonomous driving features, without incurring excessive costs.

The partnership is expected to significantly streamline the development process for automotive chips. By enabling manufacturers to mix and match different quantities and types of chiplets, Bosch and Tenstorrent will facilitate the creation of custom processors tailored to specific vehicle requirements. This not only reduces the costs associated with chip production but also accelerates the time-to-market for new silicon products, allowing automakers to respond swiftly to changing consumer demands and technological advancements.

As the automotive sector continues to embrace smart technology, the collaboration between Bosch and Tenstorrent could set new standards for the industry. The two companies plan to leverage their respective expertise to innovate in chip design and manufacturing, ensuring that the resulting products are not only efficient but also capable of supporting the latest features in vehicle connectivity and performance. This partnership could pave the way for more versatile and powerful automotive systems, marking a new era in the integration of technology and transportation.