On January 8, news surfaced that due to a decline in semiconductor industry demand, Japan's Renesas Electronics will be laying off hundreds of employees in Japan and overseas, with scheduled pay raises also being postponed!
Reportedly, Renesas Electronics employs around 21,000 staff in Japan and overseas, with this layoff representing nearly 5% of its workforce. The layoff plan was officially communicated to all affected employees by the end of 2024. In addition to the layoff plan, Renesas has also canceled the scheduled employee pay raise plan for this spring, a decision that applies to company executives as well.
Renesas Electronics is a company specializing in microcontrollers, analog ICs, and power management chips, holding a significant position in the global semiconductor market. However, with the slowdown in global economic growth and the decline in semiconductor industry demand, Renesas Electronics is forced to confront severe market challenges.
In response to these challenges, Renesas Electronics has implemented a series of measures. Apart from layoffs and pay raise deferrals, the company is actively seeking new business growth opportunities and technological innovations. For instance, Renesas Electronics is increasing its investments in areas such as automotive chips and industrial equipment power semiconductors, aiming to secure a more advantageous position when the market rebounds in the future.
According to Renesas' latest projections, revenue for 2024 is expected to decrease by 9%, reaching approximately $8.4 billion, with an operating profit margin reduction of 5 percentage points to 28.9%. Due to the impact of low demand, the utilization rate of Renesas factories has significantly dropped from around 40% in July to September to around 30% from October to December.
Additionally, the initial plan to commence large-scale production of power semiconductors required for automotive and industrial equipment at a new factory in Yamanashi Prefecture, central Japan, in early 2025 has now been postponed. A semiconductor distributor in Japan candidly stated that the market may need to wait until the latter half of 2025 for a recovery.
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Source: Guoxin Net
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