Chip maker Renesas' red ink rises
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Despite the loss of its biggest factory after last year's earthquake and tsunami in Japan, Renesas Electronics Corp. retained its status as the world's largest producer of automotive semiconductors.
According to industry rankings published by the consulting firm Strategy Analytics Ltd., Renesas generated 14 percent of the semiconductor industry's 2011 automotive sales of $23 billion.
The other top suppliers were Infineon Technologies AG of Germany, STMicroelectronics NV of Switzerland, Freescale Semiconductor Inc. of Texas and NXP Semiconductors of the Netherlands.
Among the top five suppliers, STMicroelectronics passed Freescale to become the No. 3 chip maker. But the big story was Renesas.
Despite the loss of its Naka chip plant in Hitachinaka, Japan, Renesas boosted automotive revenues 10 percent to $3.2 billion, says Chris Webber, vice president of Strategy Analytics' automotive practice.
"They did a lot to recover from the earthquake, and they did so ahead of expectations," Webber says.
He says global sales of automotive semiconductors rose 11 percent in 2011, and he expects an increase of 10 to 12 percent this year.
But there are some caveats. First, Europe's euro crisis and China's economic slowdown could dampen global auto sales. Second, the world's top chip maker is struggling.
Even though Renesas restored chip production to pre-quake levels in September, the company had a net loss of 63 billion yen, or about $630.5 million, in the fiscal year that ended March 31.
Citing company sources, Reuters reported that Renesas plans to raise nearly $1.3 billion in capital and eliminate 12,000 of its 44,000 jobs worldwide.
A Renesas executive later said no decisions about a restructuring had been made.
The company's struggles have been caused in part by shrinking demand for flat-panel TVs. By contrast, demand for engine control units has risen steadily since the recession.
Webber says automakers are improving engine control units as they design more efficient powertrains. The rapid growth of infotainment and collision avoidance systems also has boosted semiconductor sales.
And no international automakers have backed away from China despite the recent slowdown. "The emerging markets are driving up volume," Webber says. "They're all piling in."
You can reach David Sedgwick at dsedgwick@crain.com.
