Welcome!

News Feed Item

Renesas Electronics Announces Growth Strategy to Enhance Corporate Value

Renesas Electronics Corporation (TSE: 6723, hereinafter “Renesas”), a premier supplier of advanced semiconductor solutions, has been implementing a range of measures to strengthen its earnings base and financial foundation, as outlined in press releases issued on July 3, 2012 and September 28, 2012, respectively titled “The Direction of Various Measures to Establish Robust and Profitable Structure”, and “The Progress of Various Measures to Establish Robust and Profitable Structure”.

In working to strengthen the company’s earnings base, since the merger on April 1, 2010 Renesas has been pursuing integration synergies, and building on its dominant number one position worldwide in the microcontroller (MCU) market by optimizing our business portfolio and streamlining the manufacturing structure among a range of other such measures. Steady implementation of these measures has produced tangible results, including an approximate 20% reduction in fixed costs in the last two years.

However, after considering the impact of the 2011 Great East Japan Earthquake, along with the impact of global economic uncertainty, Renesas determined that further measures were necessary to respond to dramatic changes in the global economic circumstances and domestic operating environment. Accordingly, following an announcement on July 3, 2012, Renesas has been implementing additional business and structural measures, centered on an early retirement incentive program and significant restructuring of domestic production sites.

The early retirement incentive program, as outlined in Renesas’ announcement of October 16, 2012, received 7,446 applications, and all applicants retired as of October 31. The restructuring of domestic production sites has been proceeded as planned, including an agreement to transfer Renesas High Components (Aomori Factory) to AOI ELECTRONICS CO., LTD. as announced on October 12, 2012. Renesas intends to continue efforts to create a lean organization and management structure, and under the current management framework the company is planning to pursue further rationalization initiatives to boost competitiveness, including further optimization of the personnel structure.

In terms of strengthening the company’s financial foundation, on September 28, 2012 Renesas announced new financing totaling 97 billion yen from major shareholders and main banks. Renesas also entered into an agreement for a syndicated loan totaling 161.1 billion yen, arranged by the main banks, which allows the company to convert short-term debt to long-term debt and secure stable long-term funding. Through these initiatives Renesas has secured sufficient funding for the foreseeable future to enable implementation of ongoing structural reforms.

Today, as detailed in a press release titled “Renesas Electronics Announces Share Issue through Third-Party Allotment, and Change in Major Shareholders, Largest Shareholder who is Major Shareholder, Parent Company and Other Related Companies”, Renesas announced a decision to issue 150 billion yen in shares through third-party allotment to The Innovation Network Corporation of Japan (hereinafter “INCJ”), Toyota Motor Corporation, Nissan Motor Co., Ltd., Keihin Corporation, Denso Corporation, Canon Inc., Nikon Corporation, Panasonic Corporation and Yaskawa Electric Corporation, with the aim of establishing a financial foundation resistant to rapid changes in the global economy and domestic business environment and investing in core business areas for growth to enable a recovery in performance. Details of the third-party allotment are available in the aforementioned press release.

In the emerging Smart Society brought about by the increasing pace of network connectivity in electronic equipment and social infrastructure, control systems that embed MCUs and IT equipment using SoCs are rapidly converging. Therefore, the new market for control systems based on MCUs is expected to expand. As this transition progresses simultaneously in advanced and developing countries, an extremely large new market will be created for the semiconductor industry to exploit. By strengthening its earnings base and financial foundation, Renesas aims to respond to these changes in the market and construct high value-added MCU-based kit solutions for customers with further strengthened Analog and Power semiconductors, which are essential to the kit solutions, while improving its competitiveness in SoCs. Renesas will realize growth in this new market by supplying platforms that combines these kit solutions with software including IPs and OS commonly used for each application, contributing to shorter development periods, increased cost competitiveness and productivity for customers.

Renesas plans to use funds raised from this capital increase by third-party allotment to realize its goal of growth in the Smart Society through investment in the five areas outlined in the table below. Based on this, Renesas seeks to ensure sales growth in these strengthened areas, and achieve stable profits, while increasing corporate and shareholder value.

 

[Specific Use of Funds Raised through Third-Party Allotment]

    Specific Use     Amount
(millions of yen)
    Planned outlay period
(i)   Investment related to leading-edge process development of MCUs and standardization of development basis     40,000     June 2013 to March 2017
(ii)   Capex related to production

(sample and mass production)

    20,000     June 2013 to March 2017
(iii)   Investment in automotive semiconductor solutions     40,000     June 2013 to March 2018
(iv)   Investment in industrial semiconductor solutions     40,000     June 2013 to March 2017
(v)   Development investment for rebuilding the management base     10,000     June 2013 to March 2016

(1) Strengthen core competencies

To strengthen the company’s core competencies, Renesas must first invest in the development of the latest 28nm MCU process technology and in the standardization of development basis as stated in (i) above, taking steps to maintain our dominant leadership of the global MCU market. Regarding capex related to production (sample and mass production) as stated in (ii) above, capex will be pursued to increase the profitability of existing processes currently in mass production and to improve competitiveness of the latest processes currently under development. Along with these investments, Renesas will also invest for applying finer process nodes and larger wafers to analog products, thereby improving product competitiveness.

(2) Strengthen semiconductor solution provision capabilities

In relation to investment (iii) and (iv) above, namely, investment in automotive and industrial semiconductor solutions, Renesas will strengthen its Analog & Power semiconductor technological capabilities, which are indispensable to kit solution proposals for customers, centered on our existing dominant leading market share in MCUs, as well as to pursue M&A and collaborations in Analog & Power semiconductors to enhance the product line up. In addition, as a means of increasing the ability to provide compelling solutions, Renesas will investigate M&A and collaboration with the makers of embedded operating systems and with IP vendors, and will also consider M&A with independent design houses in emerging economies.

Renesas will also pursue business expansion in semiconductor markets with high growth potential, including HEV and EV and various vehicular information systems in the automotive sector, smart-grid technology in the industrial sector, and also in the area of new electronic controls equipment that is being driven by the progress of network connectivity of electronic equipment and social infrastructure in the emerging Smart Society, as noted above.

(3) Increase resistance to rapid market changes

In relation to investment (v) above, namely, development investment for rebuilding the management base, one of the aims is to improve the business evaluation system to speed up decision-making in response to sudden market changes. Another is to improve resistance to seismic activity for manufacturing equipment, establishing multi-fab production for creating a more robust business continuity plan (BCP) to ensure the stable supply of products to customers.

Through this growth investment, which is necessary to survive and prosper amid tough global competition, Renesas will strive to enhance core competencies that differentiate its business from competitors and achieve a rapid improvement in profitability. In the mid-and-long term, Renesas aspires to develop its platform business, strengthen semiconductor solution provision capabilities and optimize customers’ systems, thereby contributing to sales growth in core areas, higher profitability, and improved corporate and shareholder value in the future.

About Renesas Electronics Corporation

Renesas Electronics Corporation (TSE: 6723), the world’s number one supplier of microcontrollers, is a premier supplier of advanced semiconductor solutions including microcontrollers, SoC solutions and a broad-range of analog and power devices. Business operations began as Renesas Electronics in April 2010 through the integration of NEC Electronics Corporation (TSE:6723) and Renesas Technology Corp., with operations spanning research, development, design and manufacturing for a wide range of applications. Headquartered in Japan, Renesas Electronics has subsidiaries in 20 countries worldwide. More information can be found at www.renesas.com.

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
We’ve worked with dozens of early adopters across numerous industries and will debunk common misperceptions, which starts with understanding that many of the connected products we’ll use over the next 5 years are already products, they’re just not yet connected. With an IoT product, time-in-market provides much more essential feedback than ever before. Innovation comes from what you do with the data that the connected product provides in order to enhance the customer experience and optimize busi...
Up until last year, enterprises that were looking into cloud services usually undertook a long-term pilot with one of the large cloud providers, running test and dev workloads in the cloud. With cloud’s transition to mainstream adoption in 2015, and with enterprises migrating more and more workloads into the cloud and in between public and private environments, the single-provider approach must be revisited. In his session at 18th Cloud Expo, Yoav Mor, multi-cloud solution evangelist at Cloudy...
In his session at @ThingsExpo, Chris Klein, CEO and Co-founder of Rachio, will discuss next generation communities that are using IoT to create more sustainable, intelligent communities. One example is Sterling Ranch, a 10,000 home development that – with the help of Siemens – will integrate IoT technology into the community to provide residents with energy and water savings as well as intelligent security. Everything from stop lights to sprinkler systems to building infrastructures will run ef...
SYS-CON Events announced today that Enzu, a leading provider of cloud hosting solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Enzu’s mission is to be the leading provider of enterprise cloud solutions worldwide. Enzu enables online businesses to use its IT infrastructure to their competitive advantage. By offering a suite of proven hosting and management services, Enzu wants companies to foc...
So, you bought into the current machine learning craze and went on to collect millions/billions of records from this promising new data source. Now, what do you do with them? Too often, the abundance of data quickly turns into an abundance of problems. How do you extract that "magic essence" from your data without falling into the common pitfalls? In her session at @ThingsExpo, Natalia Ponomareva, Software Engineer at Google, will provide tips on how to be successful in large scale machine lear...
SYS-CON Events announced today that Stratoscale, the software company developing the next generation data center operating system, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Stratoscale is revolutionizing the data center with a zero-to-cloud-in-minutes solution. With Stratoscale’s hardware-agnostic, Software Defined Data Center (SDDC) solution to store everything, run anything and scale everywhere...
Digital payments using wearable devices such as smart watches, fitness trackers, and payment wristbands are an increasing area of focus for industry participants, and consumer acceptance from early trials and deployments has encouraged some of the biggest names in technology and banking to continue their push to drive growth in this nascent market. Wearable payment systems may utilize near field communication (NFC), radio frequency identification (RFID), or quick response (QR) codes and barcodes...
Angular 2 is a complete re-write of the popular framework AngularJS. Programming in Angular 2 is greatly simplified – now it's a component-based well-performing framework. This immersive one-day workshop at 18th Cloud Expo, led by Yakov Fain, a Java Champion and a co-founder of the IT consultancy Farata Systems and the product company SuranceBay, will provide you with everything you wanted to know about Angular 2.
You think you know what’s in your data. But do you? Most organizations are now aware of the business intelligence represented by their data. Data science stands to take this to a level you never thought of – literally. The techniques of data science, when used with the capabilities of Big Data technologies, can make connections you had not yet imagined, helping you discover new insights and ask new questions of your data. In his session at @ThingsExpo, Sarbjit Sarkaria, data science team lead ...
Unless you don’t use the internet, don’t live in California, or haven’t been paying attention to the recent news… you should be aware that self-driving cars are on their way to becoming a reality. I have seen them – they are real. If you believe in the future reality of self-driving cars, then continue reading on. If you don’t believe in the future possibilities, then I am not sure what to do to convince you other than discuss the very real changes that will roll out with the consumer producti...
SYS-CON Events announced today that Men & Mice, the leading global provider of DNS, DHCP and IP address management overlay solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. The Men & Mice Suite overlay solution is already known for its powerful application in heterogeneous operating environments, enabling enterprises to scale without fuss. Building on a solid range of diverse platform support,...
SYS-CON Events announced today that Peak 10, Inc., a national IT infrastructure and cloud services provider, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Peak 10 provides reliable, tailored data center and network services, cloud and managed services. Its solutions are designed to scale and adapt to customers’ changing business needs, enabling them to lower costs, improve performance and focus inter...
You deployed your app with the Bluemix PaaS and it's gaining some serious traction, so it's time to make some tweaks. Did you design your application in a way that it can scale in the cloud? Were you even thinking about the cloud when you built the app? If not, chances are your app is going to break. Check out this webcast to learn various techniques for designing applications that will scale successfully in Bluemix, for the confidence you need to take your apps to the next level and beyond.
In the world of DevOps there are ‘known good practices’ – aka ‘patterns’ – and ‘known bad practices’ – aka ‘anti-patterns.' Many of these patterns and anti-patterns have been developed from real world experience, especially by the early adopters of DevOps theory; but many are more feasible in theory than in practice, especially for more recent entrants to the DevOps scene. In this power panel at @DevOpsSummit at 18th Cloud Expo, moderated by DevOps Conference Chair Andi Mann, panelists will dis...
Whether your IoT service is connecting cars, homes, appliances, wearable, cameras or other devices, one question hangs in the balance – how do you actually make money from this service? The ability to turn your IoT service into profit requires the ability to create a monetization strategy that is flexible, scalable and working for you in real-time. It must be a transparent, smoothly implemented strategy that all stakeholders – from customers to the board – will be able to understand and comprehe...