Windsor Genova – Fourth Estate Cooperative News Writer
Tokyo, Japan (4E) – Struggling Japanese microcontroller chip maker Renesas Electronics Corp. is laying off 14,000 employees, a third of its workforce, and selling its fabrication plant to a Taiwanese firm, according to reports and unnamed sources aware of the plan.
The layoff and sale of its plant in Yamagata to Taiwan Semiconductor Manufacturing Co. is part of a restructuring plan presented to lenders and its unions following the company’s $2.45 billion dip in TV, automotive and device chip sales in the fiscal year ending March that led to an overall loss of $76 million for the period.
The Nikkei economic newspaper reported on Saturday that Renesas and Taiwan Semiconductor are still negotiating the transfer of the plant and possible absorption of its 1,400 workers.
The plant makes chips for flat-panel TVs, cameras and other digital products. Lower consumer demand for televisions and electronics caused a drop in production and plunge in sales.
Renesas is also reportedly planning to transfer about 1,000 workers, including developers of smartphone chips, to a new merger company to be formed with Fujitsu Ltd. and Panasonic Corp.
It also plans to close an LCD TV chip plant in Fukui Prefecture and other operational bases.
Renesas is offering early retirement packages to workers affected by the planned layoff. To cover the cost of the job cut, the company is issuing new shares for sale to its major shareholders Hitachi, Mitsubishi Electric and NEC as well as to foreign investors.