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Appeared on: Wednesday, October 27, 2010
Renesas to Spin Off its Mobile Multimedia SoC Business

Renesas Electronics today announced that, at a meeting of its board of directors held today, it has decided to spin off, through an absorption-type separation, its Mobile Multimedia SoC Business Division and transfer the business to a new consolidated subsidiary, Renesas Mobile Corporation, effective as of December 1, 2010.

The spin-off of the Mobile Multimedia SoC Business Division, which offers system-on-chip (SoC) products for mobile devices and car navigation systems, will be followed by the purchase of the wireless modem business of Nokia, which is scheduled to be completed on November 30 and its assets of the wireless modem business (approved, purchase in progress) will also be transferred to Renesas Mobile.

Aiming to increase its overseas sales ratio to 60 percent by FY2012, Renesas Electronics has been strengthening its business in the global market. As part of this effort, Renesas Electronics decided to purchase Nokia's wireless modem business, which enables the company to acquire extensive wireless modem technology including GSM, W-CDMA, HSPA, and LTE standards used in billions of mobile phones worldwide as well as 1,100 engineers capable of supporting these technologies. Among these wireless modem technologies, LTE and HSPA+, in particular, will play a significant role as infrastructures to enable a cloud-computing society, providing advanced high-speed wireless communication for a variety of services delivered via the Internet to mobile devices such as mobile phones and car navigation systems.

The combination of this mobile multimedia platform and assets acquired from Nokia will serve as a basis to enable Renesas Electronics to offer more robust products targeting expanding markets worldwide for LTE/HSPA+ devices, including markets for mobile phones and car navigation systems, which continue to grow rapidly, especially in emerging countries. In addition, the spin-off and establishment of Renesas Mobile will enable Renesas Electronics to build a global business structure specializing in the mobile multimedia SoC business with more streamlined management and faster time-to market product launches, which will contribute to the company's goal of expanding its global business.

As of November 30, 2010, Renesas Electronics will inherit the personnel from Nokia's wireless modem business located in Finland, India, Britain, Denmark, China, and other countries. New local subsidiaries of Renesas Mobile will be established in Finland, India, and China, and the employees will be transferred to these local subsidiaries. In addition to these regions, Renesas Design France S.A.S, which is currently Renesas Electronics' SoC design company, also will become a subsidiary of Renesas Mobile. As a result, more than 75 percent of the 1,800 total employees of Renesas Mobile will be based outside Japan enabling the new company to engage in truly global marketing and design development.

Renesas Mobile will ship its first sample of modem chipset solutions incorporating LTE/HSPA+ modems in Q4 FY2010 to customers worldwide, including Nokia, which has already agreed to adopt Renesas Mobile's offering into their products. Moving forward, Renesas Mobile will supply mobile platforms for the convergence market, which includes not only mobile phones but a variety of mobile devices such as navigation systems and netbooks as well. These mobile platforms will leverage wireless modem technology from Nokia as well as products from Renesas Electronics, such as application processors and RF ICs. Renesas Mobile also will offer SoCs incorporating LTE technology for the growing car navigation market, which is positioned as one of the convergence market, and aims to further increase its current global top market share for embedded car navigation systems.

Sales and manufacturing of Renesas Mobile products will be mainly conducted by Renesas Electronics to continuously ensure stable and dependable supply of these products.

By expanding its overseas business with a focus on mobile multimedia and launch of Renesas Mobile, Renesas Electronics expects to double the sales of mobile multimedia SoC business by March 2013, especially in overseas markets, from the current 90 billion yen achieved in FY2009.

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