(Bloomberg) — Shares of Renesas Electronics Corp. fell for the biggest intraday drop in more than 12 years, hit by a broader technology sell-off and investor disappointment over the Japanese chipmaker’s profit loss.
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Renesas shares fell as much as 17%, surpassing their daily limit and destroying $6 billion in value. The company, which supplies Toyota Motor Corp. and Honda Motor Co., the previous day reported an underwhelming operating profit in its core industrial segment, which includes factories, the Internet of Things and infrastructure-related chips.
“We were very optimistic in our outlook for the first quarter,” Renesas CEO Hidetoshi Shibata told reporters on Thursday. The company expects sales of its chips for industrial use to decline in the current quarter as it adjusts inventories, but that will be the minimum, Shibata said. “We have no intention of slowing down our R&D spending.”
The company is on an acquisition spree as it seeks to expand its customer base beyond automakers. Renesas earlier this year announced a deal to buy Australian-listed software company Altium Ltd. to advance product development and electronics design. It previously bought U.K.-based Dialog Semiconductor Plc, San Jose-based Integrated Device Technology Inc. and Milpitas, Calif.-based Intersil Corp.
Investors applauded these deals, sending the company’s shares to a record high earlier this month. The company’s market value has shrunk by $9 billion since then.
Formed from chip arms originating from NEC Corp., Hitachi Ltd. and Mitsubishi Electric Corp., Renesas has made inroads into embedded semiconductors, or chips designed to work with other processors in systems such as cars and robots. Its ambition was to satisfy the growing demand of customers dealing with increasingly complex and interconnected electronic products.
(Updates with background)
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