The automotive industry is going through a major shift, as cars are being made with additonal technology, including software for self-driving cars and connected devices. The auto tech sector is highly fragmented, and software makers are getting snatched up, as more companies invest in the sector. Renesas, Samsung and Verizon are some of the buyers in the space.

Renesas Electronics Corp. has been making a push to expand in auto tech. In September, the Tokyo-based company, which makes electronics for power windows and doors, announced plans to buy Intersil Corp. (Nasdaq: ISIL) of Milpitas, California, for $3.2 billion. Intersil makes chips and semiconductors that are used in batteries and on-board cameras for electric and hybrid cars. The target lists Ford Motor Co. (NYSE: F), Toyota Motor Corp. (NYSE: TM) and Nissan as some of its customers.

Renesas is taking steps to prepare itself for the mass production of self-driving cars, which it thinks will become a “reality for consumers by 2020.” In January, the company announced that it teamed with TTTech Computertechnik AG and developed a prototype electronic control unit designed for “mass production vehicles with integrated software and tools.” In addition, the company produces Bluetooth-compatible devices used for hands-free calling and connecting music players to car radios.

Other non-traditional strategic buyers have been looking to grow in the auto tech industry as well. Verizon Communications Inc. (NYSE: VZ) agreed to buy GPS vehicle-tracking company Fleetmatics Group plc for $2.4 billion in 2016. Fleetmatics, based in Dublin, develops software that tracks commercial drivers’ vehicle location, fuel usage, speed and mileage. Also in 2016, Samsung Electronics Co. said it will pay $8 billion for Stamford, Connecticut-based Harman International Industries Inc. (NYSE: HAR), which makes software used to connect auto audio systems. “We conclude that organic growth will not get us where we want to go fast enough,” Samsung chief strategy officer Young Sohn told investors. Auto tech is poised to create ample acquisition opportunities for strategic buyers as the use of software in cars continues to rise.

Technology