Renesas To Approach Shareholders For Support: Nikkei

Japan’s Renesas Electronics Corp (6723.T) will present a plan to Hitachi Ltd (6501.T) and other major shareholders on Thursday under which the loss-making chipmaker will seek to raise more than 100 billion yen ($1.3 billion) to pay for restructuring costs, the Nikkei newspaper said.

Renesas, the world’s largest maker of microcontroller chips for cars, has posted cumulative net losses of nearly $6 billion over the past seven years as it struggles to keep up with South Korea’s Samsung Electronics (005930.KS) and others in an expensive race to build ever smaller and faster chips.

Under the restructuring plan to be submitted to Hitachi, Mitsubishi Electric Corp (6503.T) and NEC Corp (6701.T), Renesas will also aim to slash as many as 14,000 jobs and sell its Tsuruoka system-chip factory, the Nikkei said.

The Yomiuri newspaper reported that Hitachi, Mitsubishi Electric and NEC would hold board meetings on Thursday afternoon to consider their response to the request by Renesas.

Renesas and the three shareholders declined to comment. A source close to the matter told Reuters on the weekend that Renesas plans to sell off loss-making operations and cut its payroll by at least 12,000 as the company battles high costs and nimbler foreign rivals.

The sale of the Tsuruoka system chip factory and its Renesas Mobile unit, which makes chips for mobile phones, would remove another 3,100 workers from its payroll, while the remaining reductions would come via natural attrition and restructuring at other facilities, the source said.