Renesas Electronics is forsaking its microwave device business.

The company announced that it is planning to stop the production and supply of microwave devices, shutting down the business in the summer of 2018. According to Renesas, its microwave device division has been pulling back from product development for some time.

Renesas’ microwave enterprise was a part of its larger effort to push compound semiconductive devices that use such materials as GaAs or SiGe.

Among the main microwave devices Renesas has been selling are low-noise amplifiers (LNA), RF switches, mixers and RF transistors used for wireless equipment.

This business unit generated about 6 to 7 billion yen ($59 million–$69 million), roughly 1% of Renesas’ annual net sales—693.3 billion yen ($6.857 billion)—in the fiscal year that ended in March. The division has been profitable in recent years.

Asked why the company decided to get out of the business, Renesas explained, “Although it’s profitable, we haven’t invested in technology and product development in recent years. Many of our microwave device products are likely to be further integrated in system LSIs.

"Moreover, we’ve seen more competitors emerging—particularly in Taiwan—and we’ve observed further price erosion on the market. Under such an environment, we’ve concluded that our division won’t be able to sustain its profitability for too long.”

Speaking of microwave devices currently in mass production, Renesas said, “We will get engaged with our customers for further discussions, so that the closure of our business—two years from now—will have minimum disruption to our customers’ business. Depending on their request, we could produce more devices in advance and keeping them in stock.”

Pivot to optical devices

This decision will be accompanied by a shift in the focus of Renesas’ compound semiconductor device business to optical devices.

"The optoelectronics segment of the compound device business is showing improved business performance due to the effects of manufacturing-related structural reforms and continuing strong market growth," Renesas said in a statement.

The company hopes to expand this division by accelerating the development of highly reliable photo couplers for industrial equipment, in addition to innovations in laser and photodiodes designed for optical communications in data centres and base stations.