Renesas losses continue, company looks to make more savings

In the three years since the merger between Renesas and NEC Electronics, the company has reduced its fixed costs by approximately ¥210bn ($2.2bn), while improving its break even point by ¥370bn ($3.8bn). However, the reforms have been accompanied by a decline in sales, resulting in what it describes as a 'substantial current term deficit'. Looking to further reduce its overheads, the company is planning to outsource more production. Production will be maintained at its Naka (pictured), Kawashiri and Saijo fabs, but will either be scaled back or closed at other facilities. Meanwhile, head count has dropped from around 48,000 to fewer than 33,000 at the end of June. Renesas' management is looking to implement change in three ways: retain and enhance its technology; build a flexible production system to handle market changes; and improve production efficiency. One way in which it is trying to change its fortunes is to move away from being a device supplier. While noting that device sales will continue to be an important source of revenue, Renesas believes demand is growing for what it calls 'kit solutions' – mcus, analogue devices and power semiconductors optimised for particular applications. It also says it will develop platform solutions.