Renesas will continue to rely on contract semiconductor manufacturers

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Renesas Electronics, one of the world’s largest suppliers of chips for automotive electronics, said it plans to continue ordering its products from contract manufacturers, despite the Japanese government trying to revive local semiconductor manufacturing.

Renesas will continue to rely on contract semiconductor manufacturers

Although the Tokyo-based company manufactures some of the chips in-house, it relies on overseas manufacturers such as TSMC for more advanced products. The company intends not only to adhere to this strategy, but also to continuously increase the use of contract manufacturing in order to maintain profitability.

This is due to the development of more and more subtle norms of the technical process. At Renesas facilities, production is only possible at 40 nm and more.

Renesas, formed in 2010 by the merger of semiconductor divisions Hitachi, Mitsubishi Electric and NEC, has carved a lucrative niche in an industry dominated by giants such as Intel, Nvidia, Qualcomm, TSMC and Samsung. Strong diversification beyond the automotive electronics market and major acquisitions helped strengthen the company’s position. In 2017, Intersil was acquired, in 2019, Integrated Device Technology, and this year, Dialog Semiconductor. The acquisitions helped transform Renesas from a company focused on the domestic Japanese market to a global chip manufacturer. Today, non-automotive electronics businesses account for more than half of Renesas’ revenues and two-thirds of its profits.

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