Renesas gets $1.5bn from government and customers
Renesas Electronics has confirmed today that it has received a planned ¥150 billion ($1.5bn) investment in its semiconductor business from the government-backed Innovation Network Corporation of Japan (INCJ) and a consortum of its customers.
The new investors – INCJ, with Toyota, Nissan, Keihin, Denso, Canon, Nikon, Panasonic and Yaskawa Electric will become Renesas’ major shareholders as it rebuilds it business following a difficult period following the Japanese Tsunami disaster.
According to out-going European president Rob Green, this change of ownership has brought “new financial discipline” to the company.
Another key change has been the appointment of a new CEO Hisao Sakuta (pictured), who joins the company from Omron Electric.
The investment is part of a re-financing programme which is helping Renesas recover from the problems of 2011/12. “We are turning the corner as a result of the financial reforms already in place,” said Green.
The company returned to an operating profit in the second half of 2012. “The company is through this difficult period and starting to show results,” said Green.
One result is the chip maker has exited, once important, consumer and mobile phone businesses.
Broadcom has agreed to acquire assets and semiconductor technology of the 4G LTE mobile chipset business of Renesas Electronics in a deal valued at $164m.
It is now focusing on three business areas, which it sees as less volatile markets and more suitable for its long term business investment.
These markets are automotive, industrial, including home automation, and wireless network infrastructure.
“These long life-cycle product markets fit well with our DNA,” said Green.
As part of significant restructuring, the company has lost 15,000 staff. Many of these employed at the wafer fabs and assembly facilities which the company closed or sold in the last 12 months.
The long term plan is to outsource over half of its chip production from foundries. As a result only about 12% of the new investment will go into capital expenditure.
Last year, Renesas entered into a strategic process technology agreement with foundry TSMC, which will supply all of its most advanced SoCs and microcontrollers on 40nm process technology.
This agreement now includes the 28nm process node and will probably go further.