A comprehensive restructuring program has led the Tokyo-based high-end chip manufacturer Renesas to outsource production to Taiwan Semiconductor Manufacturing Co, the company has announced.
Renesas recently revealed restructuring plans that include selling off flagging businesses, cutting over a quarter of its 46,000-strong workforce and raising over 100 billion yen (£801.9 million) in new capital.
Renesas, the world's fifth-largest chip manufacturer, has said some 30 per cent of its chips would be made overseas by 2017, a figure twice that of the amount of chips it currently produces elsewhere.
The company's stock tumbled 11 per cent to a record low after the plans were announced. Shares of NEC, the IT company that owns nearly 35 per cent of Renesas, dropped by 9.2 per cent. Other stockholders Hitachi and Mitsubishi saw little change in their stock.
The restructuring is pending official approval from shareholders before it being finalised.
Renesas' semiconductor systems and microcontrollers are widely used in mobile phones, but changes in the industry and fierce competition from Chinese and South Korean manufacturers have stemmed its growth.