Japan-based chipmaker Renesas Electronics has unveiled measures to return to profitability, including plans to streamline its production facilities, and eliminate about 5,000 positions.

"We will establish robust and profitable business structure by ensuring execution of production reformation in Japan and streamlining of employees," Renesas said in a statement.

Renesas indicated that the move to reform domestic production sites is aimed to be more focused on its target markets and optimize production capacity. Of its 15 front-end production lines (located in nine fabs), five lines mainly 150mm and 125mm will be sold or shut down, the firm revealed.

Renesas added its recently-announced transfer of a 150mm line to Fuji Electric is part of its plan for streamlining production.

As for the back-end facilities, as many as six sites of Renesas' currently-owned nine will be closed or transferred to other companies, according to the company. Renesas noted it will accelerate outsourcing and expand the use of sub-contractors inside or outside Japan.

In addition, Renesas noted that the company has made a proposal to the labor union to implement an early retirement incentive program, and started discussion. Renesas will offer special incentives in addition to their retirement payments to employees voluntarily taking early retirement. "We have not set upper limitation of applications for the early retirement incentive program, but expect about five thousand and some hundred applicants," Renesas said.

The planned job cuts will help Renesas achieve a cost reduction of about JPY43 billion (US$540 million) per year, Renesas disclosed.

Renesas Electronics was set up in April 2010 as a result of the merger between NEC Electronics and Renesas. In the year ended March 31, 2012, the firm swung to operating losses of JPY56.8 billion from profits of JPY14.5 billion a year ago.

Renesas designs and manufactures microcontrollers, SoC solutions, and analog and power devices.