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Message from CEO

Investing Management Resources Strategically to Achieve 20% Operating Margin

 Aiming to be a global enterprise that contributes to the development of society and industry and to achieve ongoing success in a global semiconductor market subject to sudden changes and stiff competition, the Renesas group adopted a Reform Plan in October 2013 with the two key themes of “growing revenue through selection and concentration of businesses” and “improving profitability through structural reforms.” The Group has endeavored as a unified team to meet these goals.
 Implementation of the Reform Plan came to a successful conclusion on March 31, 2016, and our goal of establishing the financial foundation for a corporate structure capable of generating profit stably and consistently is now in sight.

 From the fiscal year ending December 31, 2016,* onward we are undertaking a new growth strategy to ensure that Renesas will survive and prosper amid the global competition. The orientation of our growth strategy, announced in November 2016, is “to be No. 1 in fields in which stable future growth is anticipated, such as automotive, industrial, and broad-based (product categories aimed at a wide array of customers, such as IoT), in the key segments where Renesas’ strengths lie,” and we have set medium-term management targets to help translate this orientation into concrete action. Our goals for 2020 and after are to achieve, in the markets Renesas is focusing on, semiconductor sales growth twice that of the prevailing rate, 50% gross margin on sales, and 20% or better operating margin.

 To achieve the above targets, we are strategically investing management resources in the fields we are focusing on and distributing them where they are needed most. Specifically, in key fields where Renesas already has an established position, such as automotive and industrial, we are focusing management resources on maintaining the competitiveness of existing products. At the same time, we are aggressively investing management resources in segments where rapid future growth is expected, such as autonomous driving vehicles, Industry 4.0, and IoT, with competitiveness as the cardinal point, in order to strengthen and expand the position of Renesas. In particular, we expect our acquisition of a US-based semiconductor company Intersil Corporation, announced in September 2016, to boost the competitiveness of Renesas, especially in analog semiconductor devices.

 The acquisition of Intersil was completed in February 2017. We plan to proceed with the integration of the two companies and to focus management resources on key segments. In this way we will devote ourselves wholeheartedly to achieving the No. 1 position in key segments within the fiercely competitive global environment and boosting operating margin to 20%. I look forward to your continued support and understanding as we move forward with these efforts.

March 2017
Bunsei Kure,
Representative Director, President and CEO

(Note) Renesas Electronics Group implemented a change of the fiscal term in which the fiscal year-end will change from March 31 to December 31 starting from the fiscal year 2016. The current fiscal year (fiscal year ending December 31, 2016) in which the transition to the new accounting period is to take place, will comprise the financial results for the nine months from April 1, 2016 to December 31, 2016.

 
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