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July 27, 2013, 11:42 a.m. EDT

Renesas Electronics to close chip foundry: report

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By MarketWatch

TOKYO (Nikkei) -- Renesas Electronics Corp. (RNECY, 6723.TO) has firmed up plans to shutter its mainstay production base for system chips in Tsuruoka, Yamagata Prefecture, as early as fiscal 2015, The Nikkei learned Friday.

This will mark the first closing among the nation's six state-of-the-art semiconductor facilities, underscoring the difficulty in keeping pace with Taiwanese dedicated chip foundries.

Larger wafer sizes enhance efficiency in chip production, with 300mm wafers currently the largest. Renesas's Tsuruoka base, Fujitsu Ltd.'s (FJTSY, 6702.TO) Kuwana plant in Mie Prefecture, and Toshiba Corp.'s (TOSYY, 6502.TO) Oita plant are among the most advanced.

The Tsuruoka plant mass produces cutting-edge chips capable of multiple-task processing, but it has grown unprofitable amid sagging demand for use in game consoles.

The Tsuruoka plant's roughly 1,000 employees will be offered early retirement or reassigned to other group operations.

The chipmaker will likely seek additional closings and job cuts.

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