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Thursday, June 21, 2012
Renesas' top investors, lenders plan ¥100 billion prop
Three key shareholders of Renesas Electronics Corp. and the ailing chip-maker's four major banks have agreed to extend additional assistance of ¥100 billion to avert its bankruptcy.
The new financial aid will allow Renesas to slash more than 12,000 jobs — or about 30 percent of its workforce, halve the number of its domestic plants and refinance loans due by the end of June, reports said Tuesday.
The shareholders — NEC Corp., Hitachi Ltd. and Mitsubishi Electric Corp. — will provide about ¥50 billion of the assistance and the four banks will maintain existing credit lines of up to ¥50 billion.
Hitachi and Mitsubishi will provide ¥34 billion in aid and though NEC, Renesas' largest shareholder, will not provide loans as its own business is struggling, the company will waive payments over information systems and other products already sold to the chip-maker, according to an executive.
Taiwan partner boost
Renesas Electronics Corp. said its partnership with Taiwan Semiconductor Manufacturing Co. will help boost its market share and operating margin.
The world's largest maker of microcontrollers for cars, Renesas aims to raise its share of the market to 35 percent in five years from 27 percent last year, targeting customers in emerging countries, said Senior Vice President Shinichi Iwamoto.
The alliance with TSMC will help reduce fixed costs and widen profit margin, Iwamoto said Tuesday.
It may also help raise the percentage of products made for Renesas by other companies to about 30 percent in 2016 from 15 percent last fiscal year, Iwamoto said. TSMC, the world's largest custom chip-maker, will start to ship 40-nanometer chips to Renesas for microcontrollers used in cars, including to trigger air bags, the two firms said May 28.
"TSMC has flexible production capacity and technology, which will broaden our business," Iwamoto said. The two companies will also consider cooperating in developing smaller and more energy-efficient 28-nanometer chips, he said.
"We expect to get more orders from Renesas in the future because of our collaboration on 40-nanometer and beyond," said TSMC spokeswoman Elizabeth Sun.
Falling orders for its system chips from consumer electronics makers had worsened Renesas's situation, Iwamoto said, without naming any company.
The semiconductor maker's customers include Sharp Corp., Sony Corp. and Panasonic Corp., which posted a combined ¥1.6 trillion in losses last fiscal year because of slumping demand for their televisions.
Renesas's microcontroller business has an operating profit margin of at least 10 percent, said General Manager Ryuji Omura.