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Renesas CEO discusses devt of MCU market

Posted: 01 Jan 2008     Print Version  Bookmark and Share

Keywords:Renesas  Satoru Ito  MCU 

Ito: How to make the company perform even better and obtain more profits, I think that's my biggest challenge.

Renesas Technology Corp. traces its roots back to 2003 with the merger of the semiconductor businesses of Hitachi Ltd. and Mitsubishi Electric Corp. According to IC Insights Inc., Renesas revenue in 2006 was about Rs.31,173.38 crore ($7.9 billion), making the company the 8th largest semiconductor manufacturer in the world.

In addition, Renesas is the biggest MCU player around, accounting for 23 per cent of the market. Facing this promising but highly competitive market, what will be the strategies for this MCU-centered company to keep its leading position? In this interview, Satoru Ito, chairman and CEO of Renesas, shares his views on the development of the MCU market in Asia, and how he will lead the company to further growth.

Please describe your MCU portfolios. As the leading player in the MCU market, what are your strategies to keep your competitive advantages?

MCU is a very widely used product, included in almost all electronic devices everywhere. Therefore, we must provide a comprehensive product portfolio to meet customers' various demands, from low-end 4-, to 8-, 16- and 32bit.

Right now, the 8bit Tiny series, 16bit CISC-based MCU and 32bit RISC-based SuperH are our major products, which are very competitive in terms of performance, embedded flash design and processor architecture. Meanwhile, 16bit MCU accounts for the largest shipment among these product lines.

In addition, since two different companies form Renesas, we have the H8 series that originated from Hitachi and the M16C/M32C from Mitsubishi. In practical operation, we try to leverage these two lines by making them complement each other.

In terms of revenue contribution, MCU and system solutions account for 35 per cent of our revenue. By application, mobile communications, PC/multimedia and car electronics account for 65 per cent, other applications 35 per cent. Therefore, in a bid to expand our business strength, our strategy is to focus on MCU products and then to develop complete system solutions for these three major applications.

More and more vendors are introducing ARM- or MIPS-based 32bit products, claiming the benefits of making use of the existing software ecosystem. How does this trend impact those using proprietary CPU cores like Renesas? Would you consider launching ARM- or MIPS-based products?

We already have 15 years of experience in developing flash-based MCU products, having very broad customer bases as well as third party partners. For customers, software re-usability is one of their major considerations, and we will keep developing more applications and software to meet their demands.

Business environment is practical. If we are good, there will be third parties working with us; if not, we can't get support from others. At present, we have the largest market share and abundant ecosystem support. I don't see any problems in this regard.

ARM core is a good product, and we also use it in our 3G Genesis SoC solutions. However, in MCU, we will still focus on developing our proprietary architecture; we have no plans to adopt other open cores.

To protect customers' software investment, the trend is to provide compatible MCU products. However, your 16bit and 32bit products are not compatible. Do you have any plan to address this?

Yes, we are developing a new generation CISC-based MCU architecture, which can provide 16/32bit compatibility. In addition, the new product can boost performance 10 times, reduce 50 per cent mW/MHz, with maximum embedded flash capacity up to 4Mbytes. Because of the increase of code efficiency, we can reduce core size by 30 per cent.

The new product will be sampled by Q2 09. It is a very important new technology for us. To protect customers' software legacies, the new product will be compatible with existing product lines. In the future, we will focus on the new product lines and will gradually shift the old 16/32 CISC-based products to the new architecture. But 8bit and 32bit RISC-based products will still remain the same.

Do you see any emerging applications that will drive the MCU market demand in Asia?

I think security-related applications will have a large demand. For example, in Japan now, it is very popular to use the cellphone as a payment tool. We call it an electronic purse. It requires a security mechanism in the subscriber identity module. This will be a large market as other Asian countries start implementing this. Electronic passports are also an emerging security application.

On the other hand, electric power meters are also growing quickly in China and India. As for Taiwan, E-Bike, engine control unit for motorcycles, and LED lighting are also very promising.

Right now the Japanese market still accounts for 60 per cent of revenue for Renesas, how will you expand overseas business? What are your strategies for the China and Taiwan markets?

Indeed, increasing overseas revenue is one of the biggest challenges for us. At present, the greater China area accounts for 15 per cent of our revenue. Though China contributes 8 per cent, it still includes some transfer businesses. We hope that we can double the revenue from China by 2010.

In terms of our strategy, we set up a design centre in China. We have also formed partnerships with many third party companies. We are aiming at providing complete system solutions particularly for China. The main targets are TV and DVD applications with 8bit or low-end 16bit products.

In addition, we also established back-end facilities in Beijing and Suzhou and streamlined sales operations in China. The main purpose is to increase our cost competitiveness, which is a key factor for success in China.

As for the Taiwan market, in addition to PCs, we are also targeting the mobile multimedia, digital consumer products, medical electronics and car electronics markets. Taiwan is now gaining a very important position in the worldwide PDA, personal navigation device, digital still camera, and cellphone markets. There are many design activities in Taiwan, and we are focusing there.

As for chip manufacturing, what do you think about the current fab-lite trend? Will Renesas move to such direction?

Fab-lite is just a notion of resource allocation; there is no clear definition of what a fab-lite model really is. For me, if there are good external resources that could be used, why not use them? I will try to make the best combination of in-house and outsourcing capacities. At same time, we will adhere to our consistent policy—keeping frond-end and advanced process technologies inside.

How about your 65nm/45nm process technologies? What's the ramping up schedule?

We already sampled our 65nm SH-Mobile G3 product last October and will move to mass production in FY08 (April 08-March 09). As for 45nm, we co-developed it with Matsushita, and plan to have sample shipment of 45nm mobile SoC this year and commercial production in FY09. We are now developing an integrated multimedia SoC platform, which can integrate audio, video and multiple standards onto a single chip. This platform is based on our 45nm process, which will be a very important technology for us to provide high-performance multimedia products.

Regarding 32nm, we haven't decided yet if we will keep cooperating with Matsushita; but we regard the partnership with Matsushita as one of the most important options for us. As I said, we will develop leading-edge process technology in-house, even in the 32nm node.

As the leader of one of the top semiconductor companies, what are the biggest challenges for you?

(Laughs) Of course, I have to keep the company growing. In recent years, I streamlined the R&D and business operations in a bid to make the company more efficient. Though we exited the flash business, which had an impact on our revenues, the company still performed well due to the growth of our SoC and MCU business. However, to be honest, compared with TI, our profitability is still not good enough. How to make the company perform even better and obtain more profits, I think that's my biggest challenge, but this is also my job.




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