TOKYO -- Japanese chipmaker Renesas Electronics on Thursday reported a 115 % jump in operating profit in the January to June fiscal first half, as the company recovers from a debilitating fire at its main plant and capitalizes on strong demand for semiconductors worldwide.
Renesas's six-month operating profit came to 65.6 billion yen ($600 million), as sales increased 22% to 421.5 billion yen.
Renesas is a key chip supplier for Japanese automakers, including Toyota Motor and Honda Motor. The automakers' operations have been severely hampered by the fire, which struck Renesas' flagship plant in Naka, Ibaraki Prefecture, north of Tokyo, on March 19. The fire came even as a global shortage of semiconductors worsened due to a drought in Taiwan, the world's chip production hub, and surging demand from other sectors, such as personal computer makers and data center operators, during the COVID-19 pandemic.
Production resumed at the Naka factory on April 17 and output appears to have returned to normal earlier this month. The company has said that it will make up for lost production by the end of the year.
The fire came as the Tokyo-based company, created by combining the chip units of Hitachi, Mitsubishi Electric and NEC, was trying to move from being a niche player specializing in chips for controlling automotive engines. Renesas is the world's second-largest supplier of automotive chips, after the Netherlands' NXP Semiconductors, with a share of 17%, according to market researcher Omdia.
In 2017, Renesas bought U.S. chipmaker Intersil for $3.2 billion to move into production of chips for managing power supply and consumption. Such chips are widely used in autos and factory equipment.
In 2019, Reneas bought U.S. chipmaker Integrated Device Technology for $6.7 billion to move into chips for sensors, another important area for factory automation.
Last year, Renesas announced the acquisition of Dialog Semiconductor for $6 billion. The British chipmaker is strong in semiconductors used to regulate power use in small electronic devices.
These acquisitions are expected to help reduce Renesas' reliance on the automotive business and diversify into areas such as data centers, 5G base stations and factory automation. In the last fiscal year, sales in the latter category reached 51% of the company total, compared with 48% for the former.