Renesas cuts jobs; restructures businesses, management
Renesas said it expects the unfavorable business climate to continue and on that is restructuring its business.
By Suzanne Deffree, Managing Editor, News -- EDN, January 30, 2009
With an expected loss coming and sales declining, Renesas Technology Corp has announced changes to its product lines and manufacturing strategy, 2500 layoffs, redistribution of employees, and the coming resignation of its CEO.
The Tokyo-based company’s results for its fiscal 2008, ending March 31, are expected to show $7.5 billion (680 billion yen) in net sales, down 72% from its fiscal 2007 sales, and a loss of $2.29 billion (206 billion yen) in net income, about half of the income the company recorded in the previous fiscal year.
Renesas said it expects the unfavorable business climate to continue and on that is restructuring its business. As such, the company's MCU business will be positioned as Renesas' core competence and its system solutions business will focus on fields that compliment the strategy of the MCU business. In the standard products business, which is centered on products such as power MOSFETs and analog devices, the focus will be on the three applications, including power supplies for PCs/servers, imaging display equipment, and automotive, the company said.
Regarding its MCU business, Renesas said it will consolidate product families and concentrate development resources. In its system solutions business, the company will "accelerate the development of cutting-edge technology in the fields where it is most competitive through advanced platform design techniques," Renesas said. At the same time, the company will aim to achieve synergy with the MCU business.
Part of the company's restructuring will include downsizing production capacity of its 5- and 6-inch front-end process lines, as well as moving to larger wafers.
In doing so, Renesas will close the 5-inch lines at its Kofu site in Kai, Yamanashi prefecture, and their production will be consolidated into the site's 6-inch lines. Additionally, the site's 8-inch lines will be expanded. The site acts as Renesas' main production base for standard products including diodes and transistors.
Renesas' Takasaki site in Takasaki, Gunma prefecture, will also see its 5-inch lines consolidated into its 6-inch lines. In addition, the products manufactured on the 6-inch lines are gradually being transferred to 8-inch lines at other sites, the company said. The site is a main Renesas production base for transistors and linear devices.
Renesas' Kochi site in Konan, Kochi prefecture, a main manufacturing center for MCUs and mixed-signal devices using 6-inch lines, will see its internal operations consolidated.
Further specific to MCUs, Renesas Northern Japan Semiconductor's Tsugaru factory, a manufacturing subsidiary of Renesas that produces MCUs using 6-inch lines, will see part of its lines halted to increase efficiency.
Renesas Eastern Japan Semiconductor's Gunma factory, which produces diodes and linear devices as a manufacturing subsidiary of Renesas, will re-evaluate the use of its production lines for improving efficiency.
The company further announced its employees will be redeployed to strengthen the MCU business, including reassignment of personnel from sectors of system solutions business, production units, and other areas, to design and engineering for the MCU business.
The company will also reduce its design subcontractors and temporary personnel at production sites by 2500. Moreover, the company is offering a limited-time special retirement program with an added bonus to entice voluntary workforce reduction. Renesas' actions follow 27,000 job cuts announced by fellow Japan-based electronics companies NEC and Hitachi today.
Renesas also announced today that Satoru Ito, chairman and CEO of the company since April 2006, will retire from his position. Katsuhiro Tsukamoto, currently president and COO, will be appointed chairman and board director, and Yasushi Akao, will take up the post of president, while continuing as board director, the company reported. The management changes will take effect on April 1.
