Interview with Rob Green, President & Ceo of Renesas Electronics Europe, and Tsutomu Miki, Chairman of the company
Following, on April 1st, the global merger between Nec Electronics Corporation and Renesas Technology Corp. to create a new integrated company named Renesas Electronics, also in Europe the business integration process is completed with the foundation of Renesas Electronics Europe. To better understand the real implications of this agreement, Elettronica Oggi interviewed Rob Green, president & ceo of Renesas Electronics Europe, and Tsutomu Miki, chairman of the company.
Nec Electronics and Renesas are two big players in the worldwide semiconductor industry: could you explain what key goals and synergies are expected to be achieved in the Old continent with this merger?
Rob Green: One of our key goals is to provide an improved embedded product to the market. Europe, together with Japan, is a leader in automotive electronics and our combined resources in Europe will be utilised for more product innovation to support the growing requirements of safety, convenience, security, and driver information, for example. We can also see this in new platforms for the mobile and multi-media markets as well as for industrial applications.
Rob Green, president & ceo of Renesas Electronics Europe
Tsutomu Miki: On the financial side, we’re working towards international revenues at 60 per cent. The first step is to get them up to 50 per cent, as each company currently generates about 44 per cent of its sales internationally. The European market is clearly of vital importance in achieving this goal.
What will be the first issues and the most difficult things that you plan to face immediately after the formal merger, to start the integration of the operations of the two companies in Europe? What will be, respectively, the tasks of the two management teams?
Tsutomu Miki: Our first task will be to form a single, cohesive team out of two companies that, up to now, have been competitors. We’ll start by establishing a sales organisation whose structure is transparent and clear for our customers and partners. Although team building is a challenge in any merger, don’t forget that we already have experience in this area. After all, Renesas was founded when the system LSI departments of Hitachi and Mitsubishi merged in 2003. This is proof that big mergers can succeed, as long as both parties focus on creating a new corporate culture that builds on the existing strengths of each company. It can take time for people’s mindsets to evolve, and that’s quite normal. But I’m confident we’ll get there as all the staff and management are committed to making the merger work. The whole will certainly be greater than the sum of its parts.
Tsutomu Miki, chairman of Renesas Electronics Europe
How will the prominent position of Renesas in the microcontroller (MCUs) segment influence the new market and technological strategy? How will the possible overlapping of product lines be managed in this or others areas and how this consolidation process could change the destiny of many engineers and employees, in terms of layoffs?
Rob Green: After April 1st, Renesas Electronics – the merged company’s new name – will be the world’s number 1 manufacturer of MCUs. In many applications and markets, we’ll become a key partner for our customers. This will influence our market and technological strategy more towards the key application segments. Although there will be some commonality in certain product lines, the two companies have more synergies than overlaps. Some consolidation in the production area has already been completed. Out of 15 sites with 25 production lines, 10 sites and 16 production lines remain. In Europe, the headcount of the merged company will help us take on projects and business fields that could not be addressed up to now due to resource limitations, especially at Nec Electronics. Of course we have to build an efficient organisation for long term sustainability, but our emphasis right now is on how to utilise the resources for further innovation and customer support rather than on headcount reduction.
What will be the effects of this merger in terms of evolution of the process technology and of improving the manufacturing capacity of the fabs?
Tsutomu Miki: Our larger size will certainly deliver us an advantage in the race to keep up with new process technologies, as both companies were already at the forefront of developments prior to the merger. Combining our technological strengths gives us great potential to broaden the product portfolio and provide highly integrated embedded solutions. As far as production capacity is concerned, we believe the 10 sites and 16 production lines we have now will be absolutely sufficient. We need to keep the expertise and the process technology in-house so we can manufacture our products ourselves and ensure top-flight product quality. After all, that’s what our customers demand.
What will be the key advantages for the users of these product/solutions in Europe?
Rob Green: Our products will be more highly integrated, particularly adding mixed signal functionality, creating a closer fit to the application, and running with very low power consumption. Users get the benefit of this in a very cost-effective and reliable product with improved energy consumption performance. We are seeing this in portable products, but also in the automotive market in products designed for safety, security, dashboard and body applications, for example, and also in the industrial market for solid state lighting, metering and industrial automation applications, to name but a few.