Recently, Japanese automotive and industrial chip company Renesas Electronics has decided to postpone its regular salary increase from April to October this year.

The main reason is that the slow recovery of the semiconductor market has prompted Renesas to reduce personnel expenses. Since November 2023, the company has also carried out limited scale layoffs.

Renesas Electronics reached a consensus with the union in early March this year to postpone a salary increase for the entire company. The funds saved by Renesas through this action will be injected into future investments.

Renesas stated that the scale of layoffs in Japan and abroad is limited. Half of the layoffs target overseas employees, regardless of their positions.

In terms of revenue composition, automotive chips account for approximately 47% of Renesas Electronics' revenue, while industrial, infrastructure, and Internet of Things (IoT) chips account for the remaining portion. Due to ongoing inventory adjustments in industries such as industrial chips, Renesas is concerned that the profitability of its solutions will continue to deteriorate.

In its comprehensive financial forecast released in February 2024, Renesas stated that it is unlikely to provide reliable forecasts for the new fiscal year as the semiconductor industry will remain volatile in the short term. The company only expects its consolidated revenue in the first quarter of 2024 to be between 337.5 billion yen and 352.5 billion yen, a decrease of approximately 6% compared to the previous year.

On the other hand, Renesas continues to engage in mergers and acquisitions. In January of this year, the company announced its acquisition of American power semiconductor company Transform to acquire automotive grade gallium nitride (GaN) and other power semiconductor solutions to benefit its electric vehicle business.

In February this year, Renesas Electronics announced that it would acquire EDA software provider Altium for AUD 9.1 billion (USD 6 billion) and invest in design software for PCBs and other technologies.

Renesas Electronics will also work with partners to build an OSAT factory in India. This Japanese company plans to invest 2 billion yen in the project. In addition, Renesas also plans to acquire Sequans Communications in France through a tender offer (TOB). However, due to unforeseen tax burdens, Renesas later terminated its acquisition of Sequans Communications.

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