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Analyst sees mixed outlook for Renesas

Posted: 23 Jan 2007 ?? ?Print Version ?Bookmark and Share

Keywords:Renesas? 45nm? 65nm? IC devices? semicon?

The outlook for Japan's Renesas Technology Corp. is mixed in what could be a sluggish year for the chipmaker, according to an analyst.

"System LSI demand for Renesas is strong, but there are price pressures and softer demand for microcontrollers," said David Motozo Rubenstein, an analyst with Jefferies Japan Ltd, in a report. "Second-half outlook for microcontrollers is challenging. Inventory levels are slightly higher (approximately 51 days outstanding) versus last year."

Renesas recently lowered its sales forecast for this year from $7.99 billion to $7.75 billion, but the chipmaker projects that it sales will hit $8.24 billion in fiscal 2008, Rubenstein said.

"Owing to firmer prices for cellphone and DVD player chips, the firm raised its operating profit forecast for FY3/07 from 16 billion yen (about $131.9 million) to 23 billion yen (about $189.6 million), a 74 percent increase from last year," he said.

Recently, Renesas said it returned to profitability in the first half of its fiscal year (April-September) after reporting two consecutive losses in its fiscal 2005. Seeking to keep pace with its rivals, the company recently outlined more details about its ongoing turnaround strategy in an effort to regain profitability and market share.

Meanwhile, Renesas' capital spending for fiscal 2007 is $659.6 million, the same level as last year. Next year's capital spending is projected to be $824.5 million. Overall capacity rose slightly to 330,000 wafers per month, from 320,000 last year. Some 280,000 wafers are made in-house, while 50,000 are outsourced to Taiwan foundries.

"Technology in place is 90nm, with 65nm to come online this year," the analyst said. "45nm is in R&D currently and should be in production in 2008."

- Mark LaPedus
EE Times

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