Struggling Japan chipmaker Renesas to raise US$1.8 billion

The firm said it willl issue new shares to a large fund as well as firms such as Toyota, Nissan, Canon and Panasonic

Japanese chip giant Renesas is seeking a US$1.8 billion capital injection to invest in new manufacturing techniques. The world's largest microcontroller manufacturer, its products find their way into game consoles from Microsoft and Nintendo, and into cars including Toyota's Prius hybrid range.

Renesas has been attempting to turn its struggling business around for years. It cut nearly 7,500 jobs through an early retirement program this year, and sold off factories. The company hinted at further job reductions in a news release Monday, saying it was planning "further optimization of the personnel structure." For the fiscal year through March, Renesas projects a loss of 150 billion yen (US$1.8 billion), double its loss for the previous fiscal year.

The importance of Renesas to the global supply chain was clear after the magnitude-9.0 earthquake that struck off the coast of the Japan last year, knocking out a major plant in Ibaraki Prefecture, about 250 kilometers from the epicenter. That plant was far enough inland to avoid damage from the resulting tsunamis, but precision machinery was jolted out of alignment and clean rooms were damaged, leading to months of production delays for the company and its key clients.

The company plans to raise capital by issuing new shares to a large government-backed fund and large clients including Toyota Motor, Nissan Motor, Canon, Nikon and Panasonic. The government fund, called Innovation Network Corporation of Japan, may also provide up to 50 billion yen in additional funding. The share sale is to take place from Feb. 23 to Sept. 30 next year. The biggest buyers will be the government-backed fund, followed by Toyota and Nissan.

Renesas said it will use the cash raised to invest in advanced manufacturing for its products, and to develop new solutions for automotive and industrial clients. The company was formed in 2003 from the semiconductor divisions of Hitachi and Mitsubishi Electric, and merged with NEC Electronics in 2010.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags business issuesRenesasComponentsinvestmentsrestructuring

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Jay Alabaster

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Kurt Hegetschweiler

Brother PocketJet PJ-773 A4 Portable Thermal Printer

It’s perfect for mobile workers. Just take it out — it’s small enough to sit anywhere — turn it on, load a sheet of paper, and start printing.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?