Shares of CG Power and Industrial Solutions rose by over 1%, reaching Rs 729 in morning trade on October 7, following the company’s announcement of a strategic move into semiconductor design. The firm has signed a definitive agreement to acquire the radio frequency (RF) components business of Renesas Electronics Corporation for $36 million.
Renesas, a Japan-based electronics giant, generated $56 million in revenue from its RF components division in 2023. With this acquisition, CG Power will obtain intellectual property, equipment, inventories, and key employees, which will enhance its capabilities in RF component design and marketing. To oversee the newly acquired assets, CG Power has launched a subsidiary, CG Semi Pvt Ltd, which will manage the Outsourced Semiconductor Assembly and Test (OSAT) operations.
Vellayan Subbiah, Chairman of CG Power, emphasized the significance of the deal, stating that many prominent global semiconductor designers are of Indian origin. He expressed confidence that this acquisition will strengthen India’s presence in the semiconductor sector, which is known for high growth and profitability.
Davin Lee, Senior VP of Renesas, commented that the sale of the RF business will provide opportunities for the RF team to expand while allowing Renesas to sharpen its focus on its core analog and connectivity business.
This acquisition follows CG Power’s earlier announcement in March 2024 of a joint venture with Renesas and Stars Microelectronics to establish an OSAT facility in India, further solidifying its entry into the semiconductor industry. The market responded positively, with CG Power shares trading at Rs 725 at 9:20 am, up by 1 percent on the NSE. Since the beginning of the year, CG Power shares have surged by an impressive 60%, reflecting strong investor confidence.