Renesas looks to automotive and smart society to drive recovery

July 18, 2012 // By Paul Buckley
Early in July 2012 Japan's Renesas Electronics Corp, the world's fifth-largest chipmaker, announced plans to reduce its workforce by 12 percent and shed half of its domestic plants within three years to be more competitive with overseas rivals. Can Europe help the company hit the road to recovery?

A more global outlook is going to play a key part in the restructuring strategy which Renesas, the world's leading supplier of microcontroller chips, is planning after the company has posted two consecutive years of losses following massive supply disruptions in the wake of natural disasters in Japan and Thailand.

Renesas, a product of successive mergers of the chip divisions of major shareholders Mitsubishi Electric Corp , Hitachi Ltd and NEC Corp, said the job cuts would save the company 43 billion yen ($541.97 million) annually.

In return for the restructuring, the chipmaker is expected to secure 100 billion yen in loans and other forms of financial support from its major shareholders and four banks. Reports in Japan suggest that shareholders have already agreed in principle to provide 50 billion yen in assistance.

Last week eeNews Europe caught up with Robert Green, President and CEO of Renesas Electronics Europe to learn what the company is planning for its major markets in Europe as the company strives to return to profitability.

“Renesas has been changing in the past two years and is looking to be less dependent on the Japanese market. We are looking more globally now,” said Robert Green, President and CEO of Renesas Electronics Europe. “In Financial Year 11 we had the practicalities of earthquake recovery.  We managed that and we are now back to normal in terms of shipping to the market but we still have to financially recover from that situation. So this is the task for FY12”. 

Green continued: “The focus of the company has been changing in the past two years.  We need to be moving in a more global direction and be less dependent on the Japanese market. We are also focusing on the automotive market and we are very much an automotive company. And in the non-automotive sector the focus is on the so-called smart society which covers the whole development of the