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Renesas recipe for success

Posted: 05 May 2010     Print Version  Bookmark and Share

Keywords:Renesas NEC merger  analogue  microcontroller 

Renesas Electronics America president and CEO, Dan Mahoney believes they have concocted the right recipe with the formula, products and technologies for the success of the new and combined Renesas Technology.

Renesas Electronics Corp. has commenced business operations April 1 after the merger transaction between the former NEC Electronics Corp. and Renesas Technology Corp. has been completed. It will be a publically traded company in Japan. Combined, the company had Rs.47,155.95 crore ($10.212 billion) in sales in 2009, making it the world's third largest chipmaker, next to Intel Corp. and Samsung Electronics Co. Ltd.

Still, there is a lot of work to be done at Renesas. The company must integrate the operations of NEC and the old Renesas. That's no small task. And many of the tough decisions have yet to be made.

It has not been decided which fabs and leading-edge processes to keep. There also could be product overlaps and workforce redundancies. And profitability is a concern, as both NEC and Renesas lost money last year.

Going forward, Dan Mahoney, president and CEO of the company's U.S. unit, Renesas Electronics America Inc., believes the new and combined entity has the right formula, products and technologies. Previously, Mahoney was president and CEO of Renesas Technology America Inc.

During an interview at the Embedded Systems Conference, Mahoney gave six reasons why the new Renesas will succeed in the marketplace in 2010 and beyond:

1. The upturn. Thanks to the upturn and the right product mix, Renesas "will growth faster than the market average." In fact, business is strong, as the company's fabs are "running at full utilisation." It is also growing outside its home turf in Japan.

2. Resources. As a publically traded company in Japan, Renesas will have "better access to capital." Unlike most companies, Renesas can draw from the technology and research labs from its three investors: Hitachi, Mitsubishi, and NEC.

3. Product strength. There are relatively few product overlaps within the company. It will focus on three areas: analogue and power devices, microcontrollers, and system LSIs. It will bolster its efforts in analogue/power and will put resources behind its new MCU architecture, dubbed the RX.

4. IDMs still rule. Unlike most of its rivals, Renesas will continue to remain an IDM. This will give the company the ability keep design and manufacturing on the same page. It also gives the company the ability to control and maintain supply in upturns.

5. Warming up to foundries. Renesas still "calls itself an ITDM" (integrated technology device manufacturer), but the company is not opposed to work with foundries for production in terms of select parts. It is working with TSMC on select parts, but it remains a small percentage of its total output.

6. Looking at efficiencies. Over time, Renesas will make the tough decisions to cut costs. It is evaluating which fabs and leading-edge processes to keep. And importantly, the company is looking to put a priority on "customer support."

- Mark LaPedus
EE Times

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