Renesas is expecting a loss for the twelve months to March 31 2011 and will not pay any interim or final dividends. It will go to foundry for 28nm and better processes, and is looking to cut costs by $1.2bn between now and the end of March 2013.
Renesas plans to use outside foundries on all of its 28nm and smaller geometry semiconductor products. The company’s Naka. Yamagata and Truruoka plants will be transitioned to making SOCs down to 40nm and microcontrollers.
The company intends to make cumulative savings of $460m by March 2013 through merger synergies such as integrating development environments and technology platforms, material procurement, and various infrastructures, and also ntends to reduce fixed costs by $800m by March 2013.
5,000 jobs will be lost, mainly in the current financial year, as a result of the cuts.
Q2 sales at Renesas were $3.3bn and semiconductor sales were $3bn. Net loss was $376m and operating loss was $3.4m.
Sales for the six months ending September 30, 2010 are expected to be $6.8bn and sales from semiconductors are expected to account for $6.2bn.
Operating loss is expected to be $23m, ordinary loss is expected to be $93m, and net loss is expected to amount to $482m.
Despite the continuing recovery trend, Renesas expects a small operating loss to remain for the six months ended September 30, 2010, owing to the post-merger integration cost.
As for the forecasts for the fiscal year ending March 31, 2011: net sales are expected to be $13.6bn, $230m up from the initial forecast of May 11, 2010.
Semiconductor sales are expected to be $12.6bn; operating income is expected to be $80m, ordinary loss is expected to be $57m; and net loss is expected to be $914m.
Semiconductor sales are expected to increase from the corresponding period of the previous year in all three product areas, including MCU (microcontrollers), SoC (system-on-chip) solutions and analogue and power devices, owing to the market recovery that leads to increase in demand.
Of them, MCU sales are expected to mark drastic increase mainly due to solid sales of microcontrollers for automobiles and industrial systems.
Sales of analogue and power devices are also expected to increase rapidly, owing to continuously steady performance of the general-purpose discrete devices, including power MOSFETs, diodes, and small signal transistors.
Semiconductor sales for the year ending March 31, 2011 are expected to increase by approximately 16% year on year as compared with the sum of semiconductor sales at the former NEC Electronics and the former Renesas before the merger in the fiscal year ended March 31, 2010.
Operating income is expected to be $80m. Despite an increase in expenses for merger and business acquisition, a profit improvement from sales increase and fixed-cost reductions that had been conducted respectively by the former companies (NEC and Renesas), as well as cost reductions from reorganizing the Group's manufacturing structure as part of the common corporate policies of the “100-day project” and merger synergies.
Ordinary loss is expected to be $57m yen, owing to increase of non-operating expenses including foreign exchange losses and interest expenses.
Net loss is expected to be $914m, due to recording of special loss of approximately $880.6m resulting from reorganizing the Group's manufacturing structure and streamlining human resources, measures that are part of the common corporate policies of the “100-day project”.