Renesas Electronics Announces the Direction of Various Measures to Establish Robust and Profitable Structure
TOKYO, Japan, July 3, 2012 — Renesas Electronics Corporation (TSE: 6723, hereinafter “Renesas”), a premier supplier of advanced semiconductor solutions, today announced “Direction of various measures to establish robust and profitable structure”. The outline of the direction is as follows. Please refer to the attached presentation material for more details.
Renesas has been aiming for the stable growth as achieving a double-digit operating profit since the merger in April, 2010. However, the sales figure drastically declined in fiscal year 2011 as a result of the Great East Japan earthquake, flooding in Thailand, as well as sluggish world economy, and Renesas is in urgent need of business recovery. In these circumstances, Renesas is further accelerating its moves to achieve more efficient production and strengthen its financial basis to enhance its profitable structure. As part of the move, Renesas decided its direction to reform domestic production sites of Renesas Group, as well as to streamline employees, the overview of which is described below.
1. Reformation of domestic production sites
Renesas decided its direction to reform domestic production sites of Renesas Group to establish more efficient production system in line with the direction of Renesas' business strategy. Please refer to the exhibit for more details.
2. Execution of early retirement incentive program
Renesas made a proposal to the labor union today to implement an early retirement incentive program, and started discussion. The outline of the proposal is described below, the content of which shall be announced again immediately after Renesas makes a resolution followed by an agreement with the labor union.
- Eligibility: Employees of Renesas Electronics and its domestic subsidiaries
- Application Period: From September 18, 2012 to September 26, 2012
- Retirement Date: October 31, 2012
- Benefits: Renesas will offer special incentives in addition to their retirement payment to employees voluntarily taking early retirement. In addition, outplacement support will be provided through an outside agency for those who request it.
We have not set upper limitation of applications for the early retirement incentive program, but expect about five thousand and some hundred applicants.
3. Impact on Renesas' financial results
Expense required and outcome materialized for this fiscal year ending March 31, 2013 by execution of early retirement incentive program described in section 2 above is not confirmed yet at the moment, and shall be announced after confirmation. After next year, Renesas expects annual cost reduction of about 43 billion yen as a result of execution of the program. Furthermore, the impact to consolidated financial results caused by execution of each measure is not confirmed yet at the moment.
The statements in this press release with respect to the plans, strategies and financial outlook of Renesas Electronics and its consolidated subsidiaries (collectively “we”) are forward-looking statements involving risks and uncertainties. We caution you in advance that actual results may differ materially from such forward-looking statements due to several important factors including, but not limited to, general economic conditions in our markets, which are primarily Japan, North America, Asia, and Europe; demand for, and competitive pricing pressure on, products and services in the marketplace; ability to continue to win acceptance of products and services in these highly competitive markets; and fluctuations in currency exchange rates, particularly between the yen and the U.S. dollar. Among other factors, downturn of the world economy; deteriorating financial conditions in world markets, or deterioration in domestic and overseas stock markets, may cause actual results to differ from the projected results forecast.
About Renesas Electronics Corporation
Renesas Electronics Corporation (TSE: 6723), the world’s number one supplier of microcontrollers, is a premier supplier of advanced semiconductor solutions including microcontrollers, SoC solutions and a broad range of analog and power devices. Business operations began as Renesas Electronics in April 2010 through the integration of NEC Electronics Corporation (TSE:6723) and Renesas Technology Corp., with operations spanning research, development, design and manufacturing for a wide range of applications. Headquartered in Japan, Renesas Electronics has subsidiaries in approximately 20 countries worldwide. More information can be found at www.renesas.com.