On Wednesday, October 15 (Tokyo time), Renesas Electronics Corp. (TSE: 6723) was reported to be exploring the sale of its timing division in a deal that could value the business at nearly US$2 billion, according to people familiar with the matter. The Japanese semiconductor manufacturer has reportedly engaged JPMorgan Chase to advise on the potential divestment, which remains in its early stages.

Sources cited by Reuters said the process is expected to draw interest from several major chipmakers, including U.S.-based Texas Instruments (TI) and Germany's Infineon Technologies, though no formal bids have yet been submitted. Renesas and JPMorgan declined to comment, while TI and Infineon did not immediately respond to requests for comment.

The timing division develops and supplies integrated circuits for clock, timing, and synchronization, critical for maintaining precise data flow in high-speed electronic systems. Its products serve data centers, enabling communication between servers, as well as telecom infrastructure and 5G network deployments.

The potential sale comes amid surging global demand for components used in data centers and high-speed communications, driven by the rapid growth of artificial intelligence (AI) and 5G technologies. Analysts said the move could allow Renesas to raise substantial capital and sharpen its focus on core areas such as automotive and industrial semiconductors, while providing a buyer with a valuable foothold in a fast-growing segment of the chip industry.

Renesas, one of the world's leading suppliers of microcontrollers, has expanded its analog and power management portfolio through a series of acquisitions in recent years. However, analysts note that selling its timing unit would mark a strategic shift — reflecting a broader trend across the semiconductor sector, where companies are streamlining portfolios to strengthen competitiveness in next-generation technologies.

While the sale would bolster Renesas's financial flexibility, it could also mean giving up a high-performance timing IC portfolio that plays a vital role in next-generation data center and 5G infrastructure.