Renesas has withdrawn from the mobile phone semiconductor market.

Renesas Electronics withdrew from its semiconductor business for mobile phones. Many sales negotiations have been frustrated. Renesas Electronics' top priority is to "stop bleeding" for the loss-making business. In order to implement reconstruction, the new management needs to formulate new development strategies.

Renesas Electronics, which is undergoing business reconstruction, announced its withdrawal from the system LSI business for mobile phones on June 27, 2013. The three wholly-owned subsidiaries of Renesas Mobile in Finland, India and China will be cleaned up and about 1430 employees will be laid off. The domestic base of about 450 employees will be retained to develop system LSI business for automobiles and industrial equipment.

In November 2010, Renesas spent approximately US $ 200 million to acquire the semiconductor division of Nokia Finland, and on this basis, established Renesas Mobile. Renesas Mobile has proposed an ambitious plan: to combine Nokia ’s mobile communication LSI "modem" with Renesas ’processors and other products to strengthen product competitiveness and achieve sales of RMB 400 billion in FY2015 yuan. This is one of the few active investments after the merger of Renesas Technology and NEC Electronics in April 2010.

However, Renesas Mobile struggled to cope with the rapidly expanding smartphone market. It has not been able to compete with Qualcomm, which has an overwhelming market share. Renesas Mobile has always had high hopes for the big customer Nokia, but Nokia lags behind in the smartphone market, which also has a certain impact on the company.

Two and a half years after the establishment of Renesas Mobile, the accumulated loss exceeded 45 billion yen. Currently, "losses of about 2 billion yen per month" (Renesas). For Renesas, which plans to obtain 150 billion yen of investment from Japanese industrial innovation institutions and client companies to carry out reconstruction, it has been unable to bear more losses. The most urgent task is to "stop bleeding" for the loss-making business.

Renesas did not easily choose to retreat. The company announced in March that it was considering selling the system LSI business for mobile phones. Tetsuya Tsurumaru, who took office as president in February, also revealed at the settlement meeting in May that "we are negotiating with several vendors, including overseas vendors, on business sales."

Large overseas semiconductor manufacturers have also shown strong interest in the original Nokia modem business. The reason is that this business "not only has excellent technical strength in the new generation of high-speed communication standards such as LTE, but also has a greater influence when formulating international standards, and it is very attractive from the perspective of patent strategy" . According to Renesas sources, Renesas has conducted specific negotiations with the US Intel and South Korea ’s Samsung Electronics.

However, the negotiations between Renesas and the two companies have encountered setbacks. According to Renesas sources, the negotiations with Intel "due to Intel's internal reasons, the original plan became a bubble, and the responsibility is not on Renesas." After Intel sold the system LSI business for mobile phones to Marvell Technology in the US for about 600 million US dollars in 2006, it spent another 1.4 billion US dollars from Infineon Technologies in Germany in 2010. Acquired the system LSI business for mobile phones, Intel has been unable to give a clear strategic policy. In this case, "Of course Intel cannot persuade shareholders to agree to acquire the original Nokia business" (Renesas stakeholders).

Due to concerns about Qualcomm, the main supplier of the mobile phone sector, Samsung eventually abandoned the acquisition of Renesas ’system LSI business for mobile phones. Moreover, it is reported that the Japanese government also holds "opposition opinions" on this, and is worried about the outflow of technology to South Korea.

Renesas originally planned to release its medium-term management plan after completing investments in Japanese industrial innovation institutions. Although Intel and Samsung have been "coveting" the system LSI business for mobile phones, the strong technical strength of this business has not led to an increase in sales. As the main MCU business, "although it has not lost its advantages in the field of automobiles and industrial equipment, its market share in the general field is constantly declining" (Renesas President Tsurumaru).

After a deep reflection, what strategy will Renesas propose? The new president, Zuo Tianjiu, once served at Omron, and the management skills of the new management headed by him will be tested in the future.