January 8, 2025 /SemiMedia/ — Amid soft demand for various chips, Japanese semiconductor manufacturer Renesas Electronics has announced plans to cut hundreds of jobs. The company has informed employees that it will reduce its global workforce by less than 5% of its 21,000 positions. Additionally, the company will delay its planned salary increases, originally scheduled for the spring of 2025.

A spokesperson for Renesas stated that these actions are “intended to strengthen the organization and ensure long-term development, enabling the company to execute its growth strategy in a persistently weak market environment.”

Renesas expects its 2024 revenue to decline by 9%, to approximately ¥1.33 trillion ($8.4 billion), with operating profit margin expected to drop by 5 percentage points to 28.9%. Due to low demand, factory utilization fell from around 40% between July and September to about 30% in the October to December quarter. The planned large-scale production of automotive and industrial power semiconductors at a new factory in Yamanashi Prefecture, Japan, which was set to begin in early 2025, has now been postponed.

A semiconductor distributor in Japan commented, “The market is not expected to recover until at least the second half of 2025.”