Renesas Electronics Corp. agreed to buy U.S. chipmaker Intersil Corp. (Nasdaq: ISIL) for $3.2 billion, seeking to carve out a bigger role for itself as a provider of chips for automobiles as cars become loaded with more technology and add self-driving capabilities. Renesas is paying a 14 percent premium to Intersil’s closing price on Sept. 12, or $22.50 per share, according to a statement to the Tokyo Stock Exchange.

Bunsei Kure, Renesas’s chief executive officer, has been cutting jobs, closing down factories and shifting focus to automotive customers, a segment that is already generating almost half of the company’s annual revenue. The company counts Toyota Motor Corp., Nissan Motor Co. and Ford Motor Co. (NYSE: F) among its customers. Intersil’s product lineup includes semiconductors that manage battery voltage in hybrid and electric vehicles and operate on-board cameras and displays. In another recent similar deal, Infineon agreed to buy Cree Inc.’s Wolfspeed unit.

“The whole universe of chipmakers is combining to provide solutions for the automotive and industrial space, because some of these opportunities require a complete package of capability,” said Damian Thong, an analyst at Macquarie Group Ltd. in Tokyo. “It’s not so much the price of the deal that matters, it’s whether the market is comfortable with Renesas being able to execute on deal integration. In this respect, the company has a little bit to prove.” The Tokyo-based company said it plans to pay for the purchase with cash on hand and expects the deal to close in the first half of 2017, subject to regulatory and shareholder approvals.

The deal can boost Renesas’s profit by $170 million a year by combining research efforts, reducing procurement costs and because of minimal overlap in product lines and customers, the company said. Intersil, which counts Huawei Technologies Co., Lenovo Group Ltd. and Cisco Systems Inc. (Nasdaq: CSCO) among its customers, gets 89 percent of its revenue from analog devices, compared with 75 percent from logic chips for Renesas. “There are considerable opportunities for cross-selling,” Kure said at a briefing in Tokyo. “While most of Renesas customers are in Japan, Intersil has a strong presence with Chinese electronics makers.”

Kure said after taking office in June that he would look overseas for research and development. Renesas has begun to relocate some development to outside Japan, employing about 600 researchers in Vietnam and 300 in China, as well as some in Malaysia, the CEO said at the time.

Renesas was formed in 2010 through the merger of money-losing chipmakers Renesas Technology Corp., a venture between Hitachi Ltd. and Mitsubishi Electric Corp., and NEC Corp. The government-backed investment fund Innovation Network Corp. of Japan later became the chipmaker’s controlling owner when it stepped in to fund the struggling company and currently has a 69 percent stake.

The company reported its second straight year of profits in the year ended March 31, after losing more than 400 billion yen in the preceding five years. Sales totaled 693 billion yen in the period, of which about 50 percent came from automotive applications and 20 percent each for industrial use and consumers electronics. The company is reducing its domestic production lines to a total of 11 in 2016, down from 22 five years prior. Renesas slashed its workforce by almost 15,000 in the period to just short of 20,000 as of March.

“It will take four to five years to realize the full extent of synergies,” Kure said. “This tremendous combination of analog and power devices is a once-in-a-lifetime opportunity. Competing bids have pushed up the price, but we managed to secure the deal at just the right level.”