Renesas Electronics Corp. is confident that by partnering with Taiwan Semiconductor Manufacturing Co., it will be able to widen its market share as well as its operating margin. Based in Kawasaki, Japan, Renesas is considered the No. 1 producer of microcontrollers used in cars throughout the world. It supplies to companies like Toyota Motor Corp. Shinichi Iwamoto, a senior vice president who heads the unit, seeks to increase its share of the microcontroller market from 27% last year to 35% in five years. The company hopes to reach customers in emerging markets. Iwamoto said that the alliance with TSMC would contribute in cutting fixed costs and raising the profit margin.
He said that the alliance with TSMC could also play a role in increasing the ratio of products made by other countries for it from 15% last fiscal year to around 30% in 2016. TSMC, the biggest custom chipmaker in the world, will begin to ship 40- nanometer chips to Renesas for the devices that will be used in cars. These include those used to trigger airbags. He said that TSMC’s production capacity is flexible and so this will widen its business.
He also said that both companies will think about creating smaller 28-nanometer chips that offer higher energy efficiency. Last May 25, an insider said that Renesas is planning to raise capital amounting to 100 billion yen ($1.3 billion). It also seeks to cut a minimum of 1,000 jobs. Since Renesas was founded in 2010, it has yet to post a profit. These job reductions account for nearly 25% of its workforce, which currently has 42,800 members. TSMC spokeswoman Elizabeth Sun said that the company forecasts that it will likely get more orders from Renesas in the future due to its partnership on 40 nanometer and beyond.