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Tatsuo Kobayashi
(3) Few months back, Renesas management unveiled aggressive plans of closing ...
Tatsuo Kobayashi
Yoshida in Japan: Can Wii U save Renesas?
Junko Yoshida
11/17/2012 12:01 AM EST
Only bright spot for Renesas?
The Nintendo design win is a testament to the engineering expertise of the former NEC Electronics’ team. NEC Electronics, before its merger with Renesas, was responsible for the production of GPUs for Nintendo GameCube and Wii.
The Wii U design win is one of the few bright spots for Renesas on an otherwise bleak horizon. The European electronics industry is facing prolonged debt worries while the Chinese market continues to slow. China sales for Japanese car makers, a key Renesas clients, have been hit by a popular backlash against Japanese products after a territorial dispute flared up again.
Renesas’ Q2 financial results that ended Sept. 30 already incorporated the sales of GPUs for Nintendo’s Wii U. Compared to Q1, sales of SoCs in the Q2 jumped 20.6 percent to 55 billion yen from 34.4 billion yen. Most of the increase is believed to come from GPUs for Nintendo.
Renesas said it continues to expect sales of custom SoCs in the gaming segment to increase.
All bets are off, of course, if Wii U turns out to be a dud.
Related stories:
The Nintendo design win is a testament to the engineering expertise of the former NEC Electronics’ team. NEC Electronics, before its merger with Renesas, was responsible for the production of GPUs for Nintendo GameCube and Wii.
The Wii U design win is one of the few bright spots for Renesas on an otherwise bleak horizon. The European electronics industry is facing prolonged debt worries while the Chinese market continues to slow. China sales for Japanese car makers, a key Renesas clients, have been hit by a popular backlash against Japanese products after a territorial dispute flared up again.
Renesas’ Q2 financial results that ended Sept. 30 already incorporated the sales of GPUs for Nintendo’s Wii U. Compared to Q1, sales of SoCs in the Q2 jumped 20.6 percent to 55 billion yen from 34.4 billion yen. Most of the increase is believed to come from GPUs for Nintendo.
Renesas Electronics Semiconductor Sales
Source: Renesas Electronics
Q2 semiconductor sales improved by 22%, driven by large custom projects like SoCs
Q2 semiconductor sales improved by 22%, driven by large custom projects like SoCs
Renesas said it continues to expect sales of custom SoCs in the gaming segment to increase.
All bets are off, of course, if Wii U turns out to be a dud.
Related stories:
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Ed Baker
11/20/2012 3:45 AM EST
"...and here on Dec. 8"
Could you tell us where "here" is please?
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junko.yoshida
11/20/2012 3:51 AM EST
As the dateline shows, I was writing this piece in Tokyo. So, "here" means Japan.
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Ed Baker
11/20/2012 4:00 AM EST
Hi. Sorry about the confusion. As you can see I added some clarification with a further post but that was within a minute or so of your reply so I guess you didn't see it; we were no doubt typing our posts at the same time.
Kind regards.
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junko.yoshida
11/20/2012 4:48 AM EST
No problem, Ed. I found tis curious too myself --for Nitendo to release its newest product last of the three regions.
I don't have answers for it, but if any readers can chime in, it would be great!
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Ed Baker
11/20/2012 3:51 AM EST
Let me clarify my comment above in case it sounds daft - The title of the article implies Japan but it seems unusual that Japan would be the last region for release, when it is (perhaps?) the easiest in which to carry out a limited release and correct any problems which arise in a relatively small (compared to the US?) and physically local market.
I wonder what the reasoning is behind the staggered launch dates (perhaps long enough to perform firmware updates but not hardware updates on the units in stock) and the launch geographical order.
Any thought from engineers experienced in global product release? Thanks.
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echodev
11/20/2012 12:25 PM EST
My guess is they do not have enough supply for a worldwide release, but want to catch the start of the holiday shopping season in the US.
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Tatsuo Kobayashi
11/20/2012 8:05 PM EST
Hi Junko,
Renesas' problems are much severe and complex. I don't think that successful Wii can solve these problems. Let us take a look at the reality.
(1) Renesas is still directionless. Probability of KKR coming in is practically nil, but it is not clear how and when will Innovation Network take the control of Renesas. Who will be the next President and how exactly they plan to turn around the company. Will SoC business be spun off? Will Renesas mobile become a subsidiary of DoCoMo? We have been hearing this for months now, but no concrete action plan yet.
(2) Almost 7,500 people took early retirement in the end of October. From what I have heard, some of the best talent that Renesas had took advantage of this opportunity to come out of the mess. Non-performers who knew that their market worth is almost zero are still in the company. With some of the finest brains already out of the company, Renesas is now at the mercy of these non-performers. I remember reading somewhere that one of the bankers heavily criticized that almost 60-70% of Renesas top management has absolutely no experience of running a global business. I think this was understatement. I will say that more than 90% of Renesas top management is toxic.
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Tatsuo Kobayashi
11/20/2012 8:06 PM EST
(3) Few months back, Renesas management unveiled aggressive plans of closing factories and reducing the work force by 12,000. As we stand today, not a single factory has been shut. Against the target of 12,000 layoffs, the actual number stands at 7,500 (remember that company has spent almost US$ 2 billion as early retirement packages. All additional loans and cash will be gonne). It seems Renesas management feels that they have all the time in the world for cleaning up the mess. Even if they reduce the headcount by 12,000, they will still have more than 35,000 people in the company. Renesas with about US$ 10 billion revenue should not have more than 20,000-25,000 people.
Idea that a successful Wii will turnaround Renesas is like thinking that a dose of penicillin will cure cancer! Sorry, it doesn't work.
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