SAN JOSE, Calif. -- Hit hard by the IC downturn, Japanese chip maker Renesas Technology Corp. has replaced its top executive amid losses, layoffs and plans to shutter older fabs.
Amid a projected $2.294 billion loss and slumping sales for the year, Satoru Ito, Renesas' chairman and CEO since 2006, will retire from his position and will become chairman emeritus. Katsuhiro Tsukamoto, currently president and COO, will be appointed chairman and board director. Yasushi Akao, will take up the post of president, while continuing as board director.
The company is also reducing temporary workers at production sites by 2,500 employees, as well as cutting the number of contractors. In contrast to the current early retirement system, Renesas (Tokyo) is implementing a ''limited-time special retirement program'' with an added bonus for fiscal 2008.
As part of the plan, Renesas will focus more on microcontrollers and other products. The company is the world's largest MCU supplier.
Beginning in fiscal 2009, Renesas will shift an undisclosed number of employees to strengthen the microcontroller business, including reassignment of personnel from sectors of system solutions business, production units and other areas, to design and engineering for the MCU business.
It will also shutter older production lines. By downsizing the production capacity of the 5- and 6-inch front-end process lines, as well as moving to larger wafers, Renesas aims to increase efficiency in manufacturing.
Renesas plans the following moves:
*Front-end process facility: Kofu Site (Kai, Yamanashi Prefecture). The Kofu Site is Renesas Technology's main production base for standard products such as diodes and transistors. The 5-inch lines at Kofu are being closed down and their production will be consolidated into the 6-inch lines by the end of fiscal 2009. Additionally, the 8-inch lines will be expanded.
*Front-end process facility: Takasaki Site (Takasaki, Gunma Prefecture). The Takasaki Site is a main production base for standard products such as transistors and linear devices. Its 5-inch lines will be consolidated into the 6-inch lines by the end of fiscal 2010. In addition, the products manufactured on the 6-inch lines are gradually being transferred to 8-inch lines at other sites.
*Front-end process facility: Kochi Site (Konan, Kochi Prefecture). At the Kochi Site, a main manufacturing center for MCUs and mixed signal devices using 6-inch lines, the operations of the second floor are being consolidated into the first floor production lines in order to boost production efficiency. This transition is expected to be completed by the end of fiscal 2009.
*Front-end process facility: Renesas Northern Japan Semiconductor, Tsugaru Factory (Goshogawara, Aomori Prefecture). The Tsugaru Factory, a base of a manufacturing subsidiary of Renesas, produces MCUs using 6-inch lines. Part of the lines at the factory will be halted in FY2009, in order to increase efficiency.
*Back-end process facility: Renesas Eastern Japan Semiconductor, Gunma Factory (Takasaki, Gunma Prefecture). The Gunma Factory produces standard products such as diodes and linear devices as a manufacturing subsidiary of Renesas Technology. The company will re-evaluate the use of its production lines for improving efficiency.
In the current harsh business climate, the company's business results for fiscal 2008 (ending March 31, 2009) are expected to reflect a substantial reduction in net sales and incomes. Current forecasts are 680 billion yen ($7.576 billion) in net sales for fiscal 2008, down 72 percent from the previous fiscal year.
It is expected to post an operating loss of 110.0 billion yen ($1.2 billion) for the year, down 153.6 billion yen ($1.7 billion) from the previous fiscal year. It is expected to report a net loss of 206.0 billion yen ($2.294 billion) in net income, down 205.5 billion yen ($2.28 billion) from the previous fiscal year.