Renesas selling German fab to foundry services start-up
Negotiations with the new potential shareholders are proceeding and the deal is expected to close by the end of this year.
By Ann Steffora Mutschler, Senior Editor -- EDN, September 24, 2008
In an effort to streamline its manufacturing operations and cut costs, Tokyo-based semiconductor company Renesas Technology Corp is planning to sell its fab in Landshut, Germany -- Renesas Semiconductor Europe (Landshut) GmbH (RSEL) -- to newly established Germany-based foundry services company Silicon Foundry Holding (SFH), with a final agreement expected by the end of this year.
Founded by former Renesas managers from the RSEL location, SFH aims to act as a local foundry specialized in analog mixed signal production.
RSEL (pictured) has operated in Landshut for 28 years, currently produces secure microcontroller wafers for smart card applications with 0.35-and 0.18-micron processes, and employs 500 staff members.
Due to a fast developing market, with chips moving to ever-smaller sizes, Renesas said it cannot produce at high volume at small facilities like RSEL. Consequently, this reduces the load at RSEL.
Further, Renesas said it has examined the future of RSEL as part of its global activities to optimize its production resources worldwide, in parallel with efforts to cut down costs and raise the operating capacity.
Considering the economic rationale thoroughly, Renesas decided to concentrate its wafer fabrication investments in its bigger production facilities to exploit economies of scale and remain competitive.
“Having evaluated all possible options for the future of RSEL in detail, the business plan of SFH, focusing on analog mixed signal production to support local markets including lower volumes, will be a positive solution to continue RSEL’s business operations,” says Satoru Ito, chairman and CEO of Renesas, in a statement.
The agreement is still in negotiation and more information will be released when the deal closes, the company said.
In another recent cost-cutting measure, Renesas in July announced plans to reorganize its organization in China by merging sales and technical support subsidiaries. By reducing the number of the sales and technical support organizations in China from four to two, Renesas believes its actions will create a more efficient business system with unified sales and technical support operations.
