TOKYO Renesas Technology Corp. reported that fiscal 2005 year ended March with a 10 percent decline in sales to 906 billion yen ($7.9 billion) from 1 trillion yen ($8.7 billion) in fiscal 2004.
Renesas' sales decline exceeded the 3 percent fall it projected a year ago, which the company attributed to sluggish demand, leading to lower microcontroller sales, and eroding prices of driver LSIs for LCD panels for mobile phones..
In fiscal 2005, the operating profit shrank to 13 billion yen ($113 million) from 51 billion yen ($443 million) the previous fiscal year. The net profit sank to minus 2.4 billion yen (20.9 million) from 20 billion yen ($174 million) profit in fiscal 2004.
First-half business was particularly poor, though recovered in the second half to cover up the first-half plunge, said a Renesas spokesman.
For fiscal 2006, Renesas expects sales of 970 billion yen ($8.4 billion) with an operating profit of 16 billion yen ($139 million.
Renesas invested 80 billion yen ($696 million) in fiscal 2005, 30 billion yen ($261 million) of which was spent on expanding capacity of its Naka 3 300-mm wafer fab to 14,000 wafers a month. The company plans to invest the same amount in fiscal 2006, though has not disclosed spending details.