Renesas secures future with government-backed funding

Renesas Electronics aims to secure its future with $1.8bn funding from a group of some of Japan’s largest car and electronics companies and backed by government-funding.

The semiconductor manufacturer which has been under pressure this year, has announced it will issue 150 billion yen in shares through third-party allotment to the government-backed Innovation Network Corporation of Japan (INCJ), Toyota, Nissan, Keihin, Denso, Canon, Nikon, Panasonic and Yaskawa Electric.

The chip company said the intention is to establish “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”.

Some of the investment will go into new product development.

The company may also expand abroad through mergers and acquisitions.

“The INCJ intends to take the opportunity of this capital investment to pursue further measures to restore and strengthen the international competitiveness of Japan’s semiconductor industry,” said the INCJ, in a separate statement.

This long-waited financing deal for the major Japanese semiconductor company, which was badly affected by last year’s earthquake and tsunami, ends the possibility of it being acquired by private equity group, KKR.

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