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Will Japan sell Renesas to foreign companies?

Posted: 24 Nov 2015 ?? ?Print Version ?Bookmark and Share

Keywords:investment? logic business? MCU? automotive electronics?

They are in it for money

Many Japanese industry sources, including the Japanese media, hold the nationalistic view that Renesas shouldn't fall into the hands of foreign companies since Renesas supplies key components to the Japanese automotive industryan important economic engine of the nation. But an opposing camp insists that the INCJ's objectives should be no different from any other private funds in the world. The objective is to make money and the INCJ should swing deals most likely to recover its investment.

Renesas received a capital injection of 150 billion yen ($1.53 billion at that time) in 2013, after a series of mergers with other Japanese electronics companies' chip divisions whose mismanagement left Renesas with a bloated corporate structure. Renesas' troubles reached critical mass with Japan's 2011 tsunami/earthquake. This brought the company's fab to a screeching halt.


Renesas Investors (Source: Nikkei)

In an extraordinary emergency effort to save Renesas, an industry consortium consisting largely of its customersincluding Hitachi, Mistubishi Electric, Toyota, NEC, Denso, Canon and Panasonicjoined forces to invest in Renesas.

Nikkei has identified Toyota and Panasonic as potential buyers of the stake the INCJ is hoping to sell. The INCJ also reportedly asked others, such as Canon and Denso, if they're interested in a bigger piece of Renesas.

At a time when no chip shortages are imminent in the automotive electronics segment, Renesas' customers might not feel motivated to risk more capital on Renesas, however. In contrast, expansion-hungry companies such as Tsinghua Unigroup and Infineon have ample reason to want a piece of Renesas.

As for Infineon, aside from automotive chips, Renesas' businesses in the industrial controls and IoT platforms are potential areas where they might be seeing synergy.

- Junko Yoshida
??EE Times U.S.

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