Renesas still flights with restructuring plan for survival

Published:2012/5/28 1:14:00 Author:Ecco From:SeekIC

According to the Nikkei Shimbun, Japan’s economic journal, thee Japan’s largest chip companies includingPanasonic, Renasas and Fujitsu Semiconductor are in process of merging negotiations. However, Renasas is still struggling with the restructuring plan.

It is reported that the current plan calls for the three chips makes to join forces to create a new company focusing on the system LSI business while Renasas retains its profitable MCU business. Renasas will announce a partnership on Monday (May 28) with Taiwan Semiconductor Manufacturing Co. "regarding the two companies’ collaboration on MCU," according to a Renesas spokeswoman. Beacause the analysis indicates that two things must happen before three companies can strike a deal.

First, Renesas reportedly needs substantial financing before it can pull off the drastic restructuring. NEC, Hitachi and Mitsubishi, the three major Renesas shareholders, are reportedly being asked to help with financial assistance. Second, ailing Renesas must make drastic cuts. The proposed restructuring must be big enough to have a meaningful impact on its profitability while at the same time convincing the financial community that it has its house in order. Therefore, Renesas has not made a major restructuring over the last two years.

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