Business Renesas takes the medicine

Business Renesas takes the medicine

2013/08/02

Renesas is slimming down, focussing and increasingly looking to foundries.

Last year the company narrowly escaped being taken over by New York private equity company KKR.

Now that it has ben saved from that fate by the Japanese government, Renesas is looking to implement some of the productivity improvement measures which KKR would have undoubtedly introduced.

Renesas has reduced headcount from 48,000, when it merged with NEC Electronics in April 2010, to 33,000 now.

In the same timeframe, it has reduced fixed costs by 20% representing about $2 billion.

The company’s break-even point is now at about $3.6 billion.

Renesas’ focus is now on energy conservation, the environment, power efficiency and the fusion of control and IT.

‘We are working with the automotive industry on efforts to create next-generation self-driving smart cars,’ says Renesas.

‘In the industrial/networking and general-purpose fields we are aiming to by growing our business through motor solutions with power efficiency, ‘ says Renesas, ‘we are expanding kit solutions and platform solutions. Until now the semiconductor business model has centered on supplying individual MCUs, analogue devices, and power semiconductor products. Demand is growing for a model in which customers are provided with kit solutions consisting of combinations of MCUs, analogue devices, and power semiconductor devices optimized for their products.’

Renesas will continue to operate the Naka factory, Kawashiri factory, and Saijo factory sites as its main front-end production facilities. Other front-end facilities will be either scaled back or consolidated as Renesas looks increasingly to foundries. ‘As we scale back the facilities we operate ourselves, we plan to strengthen our relationships with foundries/subcontractors as strategic partners’ says Renesas.

‘Already, the number of company executives, units, and business divisions in the Renesas Group has been reduced substantially, as we move forward with efforts to slim down the organization to achieve speedier decision-making’ says the company.

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