[May 22, 2012] Renesas a victim of slowdown [The Yomiuri Shimbun] Tweet (Yomiuri Shimbun (Tokyo, Japan) Via Acquire Media NewsEdge) May 22--Declining demand from domestic electronics manufacturers is considered to be the main factor in the reported plans by major semiconductor manufacturer Renesas Electronics Corp. to slash its workforce. Domestic electronic makers, Renesas Electronics' biggest customers, have been suffering from slumping business. Renesas Electronics will speed up efforts to rebuild its corporate operation under a strategy of "selection and concentration," in which it will focus on its core business of microcontrollers for automobiles, company sources said. Renesas Electronics' major shareholding companies--Hitachi, Ltd., Mitsubishi Electric Corp. and NEC Corp.--originally had separate operations for producing large-scale integrated circuits (LSIs) that they used for their own products such as home appliances. As demand for semiconductors plunged following the bursting of the information technology bubble in the early 2000s, Hitachi and Mitsubishi Electric established Renesas Technology Corp. by integrating their semiconductor businesses in 2003, aiming to cut costs and expand market share. Renesas Electronics was born through a merger of NEC Electronics Corp. and Renesas Technology in 2010. However, domestic electronic manufacturers have been losing ground to their South Korean rivals recently, and many of them are suffering from financial difficulties. NEC, for example, is planning 10,000 job cuts worldwide. As a result, orders for Renesas Electronics' system LSIs decreased. The yen's rapid appreciation dealt another blow to the semiconductor maker. In addition, some experts say the chip maker tends to be slow to make decisions about such issues as investment. Before Renesas Electronics was established, Elpida Memory Inc., a major manufacturer of dynamic random-access memory (DRAM) chips, was jointly established by Hitachi and NEC in 1999. In 2003, Mitsubishi Electric joined the venture. However, Elpida Memory lost out to South Korean rivals in the market for DRAMs, which are used for personal computers and smartphones, resulting in Elpida Memory going bankrupt in February. Renesas remains strongly competitive overseas in microcontrollers for automobiles, with an about 40 percent global market share. This is because the firm's major customers such as Toyota Motor Corp. and Nissan Motor Co. have been performing solidly. For Renesas Electronics to rebuild itself, it will have to keep introducing high-quality products that cannot be beaten by South Korean rivals. ___ (c)2012 The Yomiuri Shimbun (Tokyo) Visit The Yomiuri Shimbun (Tokyo) at www.yomiuri.co.jp/dy Distributed by MCT Information Services [ Back To TMCnet.com's Homepage ]