Renesas Electronics plans to reduce its global workforce by less than 5%, equating to under 1,000 jobs due to weak chip demand, reported Nikkei.

The Japanese chipmaker, whose customers include automakers Toyota and Nissan, is also planning to suspend salary increases for the spring, including those for executives.

Renesas was cited by Reuters as saying that the layoffs could improve its "ability to execute the long-term growth strategy, while taking into consideration continuing market softness".

In a separate announcement, Renesas has signed an agreement with Honda Motor for the development of a high-performance system-on-chip (SoC) for software-defined vehicles (SDVs).

This new SoC will offer an AI performance of 2,000 Tera Operations Per Second (TOPS) and power efficiency of 20 TOPS/W.

The new SoC will be integrated into Honda's upcoming models of the "Honda 0 (Zero) Series" electric vehicles, scheduled for launch in the late 2020s.

Honda's ambition with the 0 Series is to craft original SDVs that offer a tailored mobility experience for each customer.

These vehicles will feature a centralised E/E architecture, consolidating various electronic control units (ECUs) into a singular ECU.

This core ECU, the heart of the SDV, will manage critical functions such as advanced driver assistance systems (ADAS), automated driving (AD), powertrain control, and comfort features on a single platform.

Renesas and Honda will develop a high-performance SoC compute solution tailored for core ECUs.

Leveraging TSMC’s 3-nm automotive process technology, this SoC aims to considerably reduce power consumption and utilise multi-die chiplet technology to merge Renesas’ Gen 5 R-Car X5 SoC series with an AI accelerator designed for Honda's independent AI software.

“With this combination, the system aims to achieve one of the industry’s top class AI performances with power efficiency,” Honda said in a statement.

This collaboration is set to expedite the incorporation of “cutting-edge” semiconductor and software technologies into the Honda 0 Series.

As part of its diversification strategy, Renesas expanded its portfolio by acquiring electronics design company Altium in August 2024 for $5.9bn.