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Renesas eyes return to pre-quake shipment levels by October

Posted: 24 May 2011 ?? ?Print Version ?Bookmark and Share

Keywords:Japan earthquake? foundries? production?

Renesas Electronics Corp. last week expressed confidence that its shipments will return to pre-earthquake volumes by the end of October. The company lost about 40 percent of its chip production capacity following the devastating March 11 earthquake that hit northeastern Japan.

The Tokyo-based company reported a net loss of $1.4 billion (115 billion yen) for its fiscal year 2011, which closed March 31. The loss was largely due to the cost of damages and loss of production following the earthquake.

Most of the Renesas facilities that were knocked offline in the quake and its aftermath have been back in at least partial production for several weeks. But the most heavily damaged Renesas fab, the Naka fab located in Ibaraki prefecture, is still undergoing repairs. The facility produces automotive and general-purpose MCUs as well as SoCs.

Renesas' current plan is to restart partial production at the Naka fab in June. The company hopes to begin shipping some parts made at the Naka fab again in August. By the end of October, Renesas hopes to have fully restored shipments of chips to pre-earthquake levels, partly through the use of third-party foundries Taiwan Semiconductor Manufacturing Co. Ltd and Globalfoundries Inc., and transfer of production to other Renesas fabs. Wafer starts at the Naka fab are expected to return to pre-earthquake levels by the end of July.

Manufacturing was previously restarted at four other Renesas front-end fabs and three back-end facilities that were knocked offline by the earthquake and its aftermath.

Renesas recorded a special loss of $606 million (49.5 billion yen) for the fiscal year associated with damage inflicted in the earthquake. This figure includes $527.8 million (43.1 billion yen) for repairs to facilities and equipment. The company said it received $195.9 million (16 billion yen) in insurance money to help offset the total cost of repairs and losses, which totaled more than $802.1 million (65.5 billion yen). Damage to the Naka fab accounted for about 85 percent of the total loss, Renesas said.

Renesas also recorded another special loss of about $820.3 million (67 billion yen) for structural reforms in the wake of the earthquake. These forms included shedding about 2,800 employees, including nearly 1,500 through an early retirement program, 600 with the sale last month of its chip fab in Roseville, California, and the move of about 700 employees to distributors and major shareholder companies. Another roughly 1,000 employees were transferred between different divisions of the company to streamline operations, Renesas said.

Renesas reported sales for the fiscal year of $14 billion (1.14 trillion yen). The company reported an operating income for the fiscal year of $1.46 billion (119 billion yen).

Renesas did not give a forecast for the current fiscal year, which closes at the end of March 2012. The company cited the earthquake, which it said has "brought uncertainty to market conditions." Renesas said it would provide a forecast for the year in July.

Renesas also announced that it recorded a special loss of $120.2 million (9.8 billion yen) on the loss of valuation in shares of its U.S. subsidiary, Renesas Electronics America Inc.

- Dylan McGrath
??EE Times





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