Sales from semiconductor business stood at 175.6 billion yen in the third quarter, down 11.8% quarter-on-quarter
The semiconductor sales (non-GAAP) of Renesas Electronics Corporation, a leading premier supplier of advanced semiconductor solutions, has recorded a decline of 8.7% year-on year in the third quarter of 2018, due to slowing demand mainly in industrial businesses.
In July-September quarter, the company recorded non-GAAP semiconductor sales of 175.6 billion yen, according to the financial results released by Renesas for the third quarter ended September 30.
The company has also changed the outlook for the fourth quarter, estimating non-GAAP semiconductor sales of 181.1 billion yen, a decline of 12.3% year-on-year.
Commenting on the results, Bunsei Kure, Representative Director, President and CEO, Renesas Electronics Corporation, said, “Our third quarter non-GAAP semiconductor sales decreased by 8.7% year-on-year, and our efforts to restrain our production volume as part of our improvement measures to achieve optimal inventory levels led to our non-GAAP gross margin to decrease by 3.3 points on a year-on-year basis.”
“For the fourth quarter ending December 31, 2018, in light of the weakening end demand mainly in the industrial business, we expect semiconductor sales to decrease year-on-year and also foresee a drop in gross margin from a year-ago quarter to continuously promote optimisation of inventory levels. As for our growth strategy, will continue our efforts to realise our medium to long-term targets,” Kure said.
Drop in consolidated net sales
The consolidated net sales of the company were 180.2 billion yen in July-September period, a decrease of 11.4% compared to the previous quarter and a decline of 7.8% year-on-year.
The sales from the semiconductor business stood at 175.6 billion yen in the given quarter, down 11.8% quarter-on-quarter and a drop of 8.7% year-on-year. The semiconductor sales saw a decline due to channel inventory adjustments.
Renesas’ non-GAAP operating income was stood at 24.1 billion yen, which is equal to 13.4% of operating margin in the third quarter, witnessing a decline of 9.8 billion yen as compared to 33.9 billion yen on a sequential basis.
Q4 outlook changed
In the fourth quarter of this year, Renesas is expecting semiconductor sales of around 181.1 billion yen, an increase of 3.1% quarter-on-quarter, and a drop of 12.3% compared to a year-ago period. For the entire 2018, the company is expecting 737.8 billion yen of semiconductor sales, a decline of 3.6% from a year ago.
