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Sunday, May 27, 2012
Struggling chip-maker may also sell Yamagata factory to Taiwanese firm
Renesas Electronics could shed up to 14,000 workers
Struggling semiconductor maker Renesas Electronics Corp. is thinking of axing around 14,000 jobs, or about 30 percent of its workforce, as it negotiates the sale of a domestic factory to a Taiwanese company, sources said Saturday.
The new job reduction target would be a sharp increase from the 6,000 job cuts previously stated in its restructuring plan, and the company is thinking of achieving the target through voluntary retirements, the sources said.
The company, which reported a ¥62.6 billion consolidated net loss in the business year that ended in March, is also working out a plan to raise more than ¥100 billion through a private share placement to bolster its balance sheet, the sources said.
The Kawasaki-based company issued a statement Saturday saying that it "did not make public what was reported in some media about our company's personnel cuts and other matters today, nor have we made any decisions" on these matters.
Renesas has been thinking of selling its Tsuruoka plant in Yamagata Prefecture, which is run by Renesas Yamagata Semiconductor Co., and sources said it is currently in discussions with Taiwan Semiconductor Manufacturing Co. to that end.
It is also considering shutting down a plant in Fukui Prefecture run by Renesas Kansai Semiconductor Co., another subsidiary that builds chips for flat-screen televisions, the sources said.
After working out the restructuring plan's details with its major creditor banks, Renesas aims to formulate plans for both plants in June, the sources said.
As for the share issue, Renesas is expected to ask major shareholders Hitachi Ltd., NEC Corp. and Mitsubishi Electric Corp. to increase their stakes in the chip-maker, although they appear reluctant to do so, the sources said.
Business conditions are tough for Japan's semiconductor manufacturers. Elpida Memory Inc., the nation's sole maker of dynamic random access memory chips, filed for bankruptcy protection in February.
In 2009, the government decided to bail out Elpida under the revised industrial revitalization law, leading to an investment of around ¥30 billion by the Development Bank of Japan.
Elpida's failure has shed light on the severity of the problems domestic semiconductor manufacturers are facing, which could accelerate moves to form tieups with other firms — including foreign corporations — to keep up with their overseas rivals.
Renesas has withheld its earnings outlook for the business year through March 2013 and has said it will skip dividend payments for the 2011 business year.
The company controls around 40 percent of the global market for microcontrollers used in automobiles, and also produces system LSI chips.
It listed on the first section of the Tokyo Stock Exchange and adopted its current name after Renesas Technology Corp. merged with NEC's semiconductor unit in April 2010.
Renesas Technology was formed through the 2003 merger of Hitachi and Mitsubishi Electric's semiconductor units.