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5 Reasons Renesas Ditched Modem Business

6/28/2013 05:00 PM EDT
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junko.yoshida
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Re: Truly sad
junko.yoshida   6/30/2013 6:45:58 AM
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Thanks for your correction in regards to the geographical breakdown of the Finnish entity' employees. I am glad you spoke out as an RMC employee. Your description of RMC -- in terms of where things are at this point for design wins -- gives a much fuller view. I do recall reporting on RMC's ambition to take on Qualcomm on several occasions in the past. http://confidential.eetimes.com/news-updates/4233596/Renesas-Mobile-Seeks-to-Be-Qualcomm-Alternative http://www.eetimes.com/document.asp?doc_id=1264611 The sad part of the whole thing is that RMC was born as a wholly owned subsidiary of deeply troubled Japanese chip giant Renesas. GeeKv2, had RMC been an independent startup, do you think it could have survived?

GeeKv2
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Re: Truly sad
GeeKv2   6/30/2013 8:36:06 AM
The thing that has baffled everyone is the fact that Renesas is pulling the plug right at the time when the labour of 7 years of hard work is finally beginning to pay off.

The problem as I see for Renesas Elec is that it will take another year until the mobile division becomes profitable. They just cannot afford the running costs until then. With the bail out funding coming from the government, they have been forced to take this step much in the same way the Greek government is firing its employees.

 

Its hard to imagine that this company could have come even this far if it was an independant startup. Bear in mind that it takes several years of R&D to make a product that can reach a consumer's hands. The funding required for it is staggering. Renesas bought this from Nokia who already had invested for 5 years so practically, they have done only about 40% of the work. Making a triple mode modem integrated with an application processor is one hell of a job.

Back when Infineon sold its modem to Intel, the reason was simple. They could not afford the R&D to compete in future and took the right decision to sell it. Intel is pumping money into R&D and will surely succeed.

 

Frank Eory
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Re: Is it the market or is it Renesas?
Frank Eory   6/30/2013 11:55:21 AM
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It might have been inevitable. If your modem isn't used by Apple or Samsung, then unless it's used by the next 4 or 5 biggest guys, it's hard to imagine that the huge ongoing investment makes business sense.

junko.yoshida
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Re: Truly sad
junko.yoshida   6/30/2013 10:47:11 PM
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Thanks for your further explanation, GeeKv2. Much appreciated it. 

Agreed. If RMC were a start-up, the company would have never come thus far. 

But here's the thing. Why wasn't RMC able to sell its team to...say...one of the Chinese fabless companies?

Many of those Chinese companies are armed with their own apps processors, but they sorely lack the modem capability.

junko.yoshida
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Re: The Only Constant is Change
junko.yoshida   6/30/2013 11:02:49 PM
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I agree with eewiz. 

As mighty as Samsung is, it's no easy task to stay on top of the very crowded Android market where the competition can only get tougher and smartphones become harder to differentiate.

 

mcgrathdylan
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Re: Is it the market or is it Renesas?
mcgrathdylan   7/1/2013 12:24:33 AM
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The acquisition was always a bit of a head turner. I've always believed in Akao and I thought somehow they'd make it work. Like you, I'm disapponted that it didn't work out.

scud
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Re: Truly sad
scud   7/1/2013 2:22:28 AM
Junko, as an RMC employee, I completely agree with GeeKv2's comments. We find this decision totally inexplicable. The supply lines have been cut just when the products are well and truly ready for the big boys in the industry.

RMC's modem had actually negotiated the minefield of certifications when this happened. The product is certified by both ATT and NTT DoCoMo (http://low-powerdesign.com/strauss/).

Also, the RMC solution was an integrated single chip triple mode solution (Modem + APE in one SoC and a triple mode RFIC). For such a product, I believe 2000 employees does not sound too bloated.

 

 

 

 

junko.yoshida
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Re: Truly sad
junko.yoshida   7/1/2013 7:21:03 AM
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Scud, I hear you. For those engineers who have truly worked hard and delivered the goods, it is not just inexplicable but unacceptable to see their efforts unnoticed, unappreciated and undervalued. It is unfair for RMC employees to be described as "bloated." But I am pretty sure that's how the company management often describes the nature of business to save their incompetence. Like I asked before, where was the company manegent when this was all happening? More significantly, where will RMC's solution -- already certified by AT&T and NTT docomo -- and its IP go?

GeeKv2
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Re: Truly sad
GeeKv2   7/1/2013 8:38:50 AM
REL has been trying to sell RMC since the past 6 months. Concerning the IP and the actual product, as Heikki (SVP, Wireless Modem, RMC) says, it will be a crime against humanity if that gets wasted. Someone will definitely buy it partly, if not the workforce.

As to why nothing has be sold so far, only REL can answer that and we are many who want to know it.

junko.yoshida
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Re: Truly sad
junko.yoshida   7/1/2013 8:45:01 AM
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GeekV2, "a crime against humanity" is exactly right. I am with you on that one.

I've also heard the same thing from another RMC executive, saying that "it's a good question" why nothing has been sold so far. 

Is it a matter of "negotiation skills" of the Japanese company, or Renesas has gotten a tad too greedy?

 

 

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