“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.”
Reflecting on Fiscal Year 2024
Fiscal year 2024 (January 1 – December 31) was marked by global inflation, rising geopolitical risks and increasing concerns over protectionist policies, fueled by the strengthening of isolationism and the rise of far-right forces. These factors heightened uncertainty in the global economy. In the semiconductor market, inventory adjustments and weak consumer demand persisted, except for products targeting AI-driven data centers. Industrial product inventory corrections continued for an extended period, while demand growth for automotive semiconductors, driven by automation and electrification, was offset by inventory adjustments.
Amid these challenging business conditions, we demonstrated agility and resilience, securing steady results. In pursuit of our "2030 Aspiration"— to become a top-three embedded semiconductor solution supplier, achieve revenue exceeding $20 billion, and increase the equity value sixfold from January 2022 levels—we strategically executed cost reductions and efficiency improvements, while making bold yet prudent investments for future growth. As a result, although revenue, gross profit, and operating income declined year-over-year, we managed to maintain a decent profit level even amid prolonged market stagnation.
Key Initiatives and Progress in Fiscal Year 2024
At the beginning of the fiscal year, we reorganized the company’s structure, transitioning from an application-oriented organization to a technology-based one to effectively address the converging needs of customers. Additionally, we established a team dedicated to software and digitalization, and restructured the Operations, Engineering and other key functions to serve as centralized foundations across all lines of business. In September 2024, we launched the UX organization to build on our strong customer relationship and further enhance customer experience by providing a unified interface with customers. In January 2025, leadership team changes were implemented to reinforce our organizational structure.
To accelerate our Digitalization strategy, we acquired Altium, a PCB design software leader, in August 2024. Integration has progressed smoothly, and in January 2025, Altium’s team was fully integrated into our Software & Digitalization Group.
Recognizing India’s rapid growth potential, we designated it as our focus market and expanded our operations accordingly. We are on track to double our workforce in India to 1,000 employees by the end of 2025. In March 2024, we signed a joint venture agreement with CG Power and Industrial Solutions and Stars Microelectronics to build and operate an outsourced semiconductor assembly and test facility in Gujarat, India.
On the product front, we launched the first device in the 5th-generation R-Car series. The R-Car X5H is a high-performance automotive SoC featuring advanced 3nm process technology that delivers the highest level of integration for power efficiency. Additionally, we introduced the RZ/V2H, an MPU with an integrated AI accelerator for next-generation robotics with both vision AI and real-time control capabilities. We also launched the RRH62000, an ultra-compact sensor module for smart air quality monitoring. These innovations, along with numerous other product releases, contributed to securing a strong pipeline of future business opportunities.
For shareholder returns, we paid a year-end dividend of 28 yen per share, reaffirming our commitment to stable and continuous shareholder value enhancement.
In terms of corporate governance, we transitioned to a Company with Nomination Committee, etc. structure from 2024 to further enhance monitoring-based governance.
On sustainability and ESG initiatives, significant achievements were made. These include our first “Business & Sustainability Report” which combines both financial and non-financial information. We continued to perform strongly in major ESG indices and rating agencies, including MSCI and FTSE Russell. Additionally, the Naka factory, our advanced front-end wafer fabrication site, achieved Platinum status from the Responsible Business Alliance (“RBA”) for our social responsibility audit. The RBA, comprising approximately 200 companies including electronic device manufacturers worldwide, aims to improve labor conditions, safety and health standards, the environmental practices, and ethics across the global supply chain.
Future Initiatives
To navigate an evolving business environment, achieve long-term growth, and ultimately realize our "2030 Aspiration," we are actively driving our "Back to Basics" strategy with a focus on three key priorities:
1. Productivity Increase
We will maximize the scale advantages of our global workforce, comprising approximately 22,000 employees across 30+ countries, while streamlining operations to improve efficiency.
2. Purposeful Investment
We will strategically allocate resources to our core embedded semiconductor solutions and their value-enhancing elements—UX & Digitalization. Our previous approach balanced short-term revenue growth with long-term strategic investments and achieved significant success. Considering the impact on our overall organization and changes in the business environment, we have decided to go “Back to Basics.” We are now prioritizing long-term growth by refining our business priorities and directing maximum resources to strategic initiatives.
3. UX & Digitalization Strategy
In January 2025, we expanded the UX Group by integrating digital marketing functions and the system solutions team to reinforce our UX initiatives.
For Digitalization, we are working with Altium as one team to establish an integrated and open “electronics system design and lifecycle management platform,” to make electronics design accessible to a broader market to allow more innovation. As part of this initiative, Altium acquired Part Analytics in January 2025, marking another step toward realizing our Digitalization vision.
Under the new structure, UX & Digitalization is positioned as our top strategic priority, and we will continue to accelerate our efforts. Our vision is to establish a comprehensive digital platform that streamlines the end-to-end process of electronics system development—from discovery, system design, production, to lifecycle management—to make our customers’ lives easier.
As part of our ESG commitment, we established a company-wide ESG organization and repositioned the Audit Committee as the Audit and Sustainability Committee in January 2025. This ensures the highest level of oversight and governance integration to enhance ESG implementation and execution. Under this refined framework, initiatives are actively advancing, including accelerating our carbon neutrality target to 2040.
Regarding geopolitical risks, short-term concerns include supply chain disruptions caused by tariffs. Medium-term trends suggest that U.S. regulatory easing and China’s focused technology investments—particularly in AI—will drive innovation. We will closely monitor these developments and continue our Digitalization efforts to strengthen long-term competitiveness.
To advance toward our "2030 Aspiration" and our Purpose, "To Make Our Lives Easier," we remain committed to delivering products and solutions that are vital to our daily lives. We appreciate your continued trust and support as Renesas evolves and drives technological progress.
Sincerely,
Hidetoshi Shibata
President and CEO
Renesas Electronics Corporation