“To materialize the ‘2030 Aspiration’ and our purpose of ‘To Make Our Lives Easier,’ we will continue to provide products and solutions that make people’s lives easier. As a member of the global community, we will remain steadfast in our commitment to further enhance our corporate value by addressing environmental issues and contributing to a sustainable society.”
During the fiscal year ended December 31, 2023, the global economy continued to stagnate as in the previous year reflecting the protracted situation in Ukraine, the deteriorating conditions in the Middle East, the global inflation, and the elevated interest rates. In line with these trends, the semiconductor market also remained sluggish. To address these situations, we have proactively implemented various measures to respond swiftly to changes and to ensure steady results even in the face of headwinds. As a result, we secured a certain level of profit in 2023 and managed to sustain our revenue to a slight decline compared to the previous year.
In 2023, to accelerate future business growth, we welcomed Panthronics, a company with expertise in near-field communication or NFC technology, into the group. We also signed a long-term supply agreement with Wolfspeed for silicon carbide (“SiC”) wafers, to ensure a stable supply of SiC wafers for power semiconductors. Furthermore, we have launched a wide array of new products and services, including: the “RA8 Series,” the industry’s first microcontrollers (“MCUs”) equipped with the high-performance Arm® Cortex®-M85 core; the “R-Car Generation 5 Product Family,” with a roadmap consisting of future offerings of R-Car system-on-chips or SoCs with advanced in-package chiplet integration technology and next-generation automotive MCUs; and “Quick-Connect Studio,” a cloud-based design platform that supports customer product development. These initiatives have resulted in securing a number of designins which will be a source of future revenue.
The year 2023 was a period in which our presence in the stock market continued to grow, following on from the previous year. Our stock was selected as a constituent of the “Nikkei 225,” the index which makes up the Nikkei Stock Average, and our market capitalization has nearly doubled in the year since the beginning of 2023. In addition, with respect to ESG, we were selected for the first time as a constituent of the “MSCI Japan ESG Select Leaders Index” by the internationally renowned MSCI Inc., recognized as a CDP Supplier Engagement Leader for our efforts in the previous year, and received the Gold rating on the Pride Index for two consecutive years. Furthermore, INCJ Corporation, which contributed to building the foundation of our growth, sold all of its shares in our company in light of our growth.
In terms of shareholder return, we acquired a total of approximately 50 billion yen of our own shares in April 2023. Considering our strengthened financial base, we have decided to resume the dividend payments and proposed, at this Shareholders Meeting, a year-end dividend of 28 yen per share. We aim to continue to return profits to shareholders on a continuous and stable basis as far as possible. We intend to do this by taking into account changes in the business environment and the balance with retained earnings for long-term growth investment.
Initiatives for the future
We will continue to make various efforts to realize our “2030 Aspiration” (“Become a Top 3 embedded semiconductor solution supplier,” “Achieve revenues of more than $20 billion,” and “Bring up the equity value by up to six times the market capitalization compared to January 2022” by 2030).
In January 2024, we implemented organizational changes to further accelerate our growth. The new organizational structure has reorganized an application-oriented organization to a technology-based business structure. This structure strengthens our capability to provide a broader range of solutions tailored to our customers’ needs. In addition, to maximize our scale merit, we have established new groups of foundations. These organizations will serve as centralized foundations across all lines of business.
Furthermore, we are pursuing a digitalization strategy that makes it easier for customers to build solutions by providing a cloud-based platform. To achieve this, we have established a new organization dedicated to software and digitalization. In February 2024, as a significant step in accelerating our digitalization strategy, we agreed to acquire Altium, a leading printed circuit board or PCB design software company.
We also agreed to acquire Transphorm, which has strengths in gallium nitride or GaN technology, in January 2024. This enables us to build on our SiC capability and enhance our portfolio of power semiconductors, which is one of the key pillars of our growth.
To strengthen our corporate governance, we have proposed at this Shareholders Meeting the transition of our company’s governance structure to a Company with a Nomination Committee, etc. We also set a new 30% board diversity target.
To materialize the “2030 Aspiration” and our purpose of “To Make Our Lives Easier,” we will continue to provide products and solutions that make people’s lives easier. At the same time, as a member of the global community, we will remain steadfast in our commitment to further enhance our corporate value by addressing environmental issues and contributing to a sustainable society. I am confident in our ability to deliver lasting value to our shareholders.
Sincerely,
Hidetoshi Shibata
President and CEO
Renesas Electronics Corporation