TOKYO, Japan ― Renesas Electronics Corporation (TSE:6723), a premier supplier of advanced semiconductor solutions, today announced its decision to withdraw from the LD (laser diode) and PD (photo diode/detector) businesses, and to close the production line at the Shiga Factory, a wholly owned subsidiary of Renesas Semiconductor Manufacturing Co., Ltd. (“Renesas Semiconductor Manufacturing”), which manufactures compound semiconductor products.
In the news release “Renesas Electronics Announces Closure of Yamaguchi Factory and Partial Consolidation of Shiga Factory (Silicon Production Line)” announced on June 1, 2018, Renesas indicated its intention to close the silicon product production line within two to three years. However, following the decision to withdraw from the LD/PD business and to close the compound semiconductor production line, Renesas plans to close all production lines at the Shiga Factory as soon as practicable.
1. Background and reasons of the withdrawal from the LD/PD business and closure of Shiga Factory
Renesas initially determined that it would be able to further expand its LD/PD business in the fast-growing optical communications market by discontinuing silicon products and downsizing production lines and maintaining and improving production efficiency at the Shiga Factory.
However, in the past few years, technological and pricing competition has intensified, leading to a decline in the market share of existing products and delays in the development of new products for next-generation communications, making it difficult to secure the revenue initially expected. For this reason, Renesas concluded that it would be extremely difficult to secure profits on an ongoing basis even with the streamlining of production lines at the Shiga Factory.
In order to maintain the production and supply of LD/PD products, Renesas has been carefully considering the possibility to transfer productions to other sites within the Renesas Group and its partner companies in Japan and abroad. However, due to the nature of semiconductor business and products and the difficulty to realize the transfer within a reasonable time frame, the decision was made to withdraw from the LD/PD business.
2. Future outlook
- Treatment of products subject to discontinuation
For customers using products subject to discontinuation, please discuss with our sales team the future actions including final requirements of the product. - Operation of the Shiga Factory
Renesas plans to cease all production at the Shiga Factory as soon as practicable based on the discussions with customers. - Employees working at the Shiga Factory
In principle, employees will be relocated to other businesses and factories.
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