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Renesas warns on falling semiconductor markets

Market news |
By Nick Flaherty


Renesas Electronics in Japan is predicting a fall in turnover next quarter as the semiconductor market falls and power costs of running its fabs increase.

The company saw a 2.8% increase in Q3 over Q2 to ¥387.6bn ($2.62bn), but warns of a drop to ¥385bn in Q4.   

“The weakness in PC and mobile is now expanding to peripherals,” said Hidetoshi Shibata, CEO of Renesas. “The guidance is worrisome to me.”

While demand in the automotive business is still firm, the other half of the business for chips for the Internet of Things (IoT) is softening. This is leading to the company building inventory in its die bank.

“We are building up our die bank inventory, this is something we can do for legacy products but less so for growth products,” said Shibata. “In Q4 we are building up our die bank. We do have to look at some of the lead times and we will see a tentative increase in inventory in Q4 and Q1.”

Power costs for fabs are also an increasing issue, said Renesas chief financial officer Shuhei Shinkai. “For production costs we are expecting ongoing increase from power costs,” he said.

The company has been expanding over the last few years into chips for the IoT with the acquisition of Dialog Semiconductor and more recently AI firm Reality Analytics and Indian 4D radar chip firm Steradian Semiconductor.

www.renesas.com

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