Feeling the pinch of manufacturing costs, Renesas Technology Corp. recently announced it has decided to close a front-end manufacturing subsidiary company, Renesas Semiconductor Europe (Alsdorf) GmbH (RSEA), in Germany.

Renesas said it plans to stop manufacturing activities at RSEA within 2004 and to transfer microcontroller, SRAM and NOR flash products to manufacturing sites in Japan.

"The semiconductor market is showing signs of expansion in the long term, and a competitive global strategy is required in such market environment," the company said in a statement. "In response to the market demand, Renesas Technology is optimizing its business structure in order to meet the needs of our customers. A business structural reform shall be executed on a mid- and long-term basis and lower manufacturing cost shall be carried out in order to improve the efficiency of the production lines. The closure of RSEA is a part of Renesas Technology's effort to optimize business structure."

Renesas said that the decision was made at a board meeting, and that RSEA will start to discuss terms and conditions with regard to this closure with the Works Council in Europe. No further detail on the move was given.