Renesas Technology Corp. (San Jose, CA), a joint venture between Hitachi Ltd. and Mitsubishi Electric Corp., announced that its profits will likely take a steep fall because of a drop in prices. For the previous fiscal year, which ended in March, Renesas posted net profit of $188 million (¥19.9 billion), compared to the previous year's ¥8.6 billion. Strong first-half sales and cost-reduction efforts contributed to the growth in profit.
Renesas recored operating profit of $482 million (¥51 billion) on the year, up 14%, but it anticipates that current fiscal-year operating profit will drop by 60.8% to $189 million (¥20 billion), on revenue of $9 billion (¥970 billion).
"We project the global chip market will remain bearish during the first half of the current year (to September)," stated Renesas President Satoru Ito. "Renesas forecasts the global chip market in the year to March 2006 will decline by 3% from the previous year to about ¥19.5 trillion."
