Renesas shares flat despite a $1.8bn bailout deal
Shares of embattled Japanese chipmaker Renesas ended the day little changed despite the firm securing a 150bn yen ($1.8bn; £1.1bn) bailout.
Its shares closed at 309 yen, higher by just 0.3%, after rising as much as 10% in early trade on Tuesday.
Renesas has been struggling and the bailout was seen as key to its plans to revive its business.
However, analysts said investors were sceptical about whether the firm would be able to restructure its operations.
The firm has announced a restructuring programme that includes job cuts and a change of focus.
"They are waiting to see the end result of all this funding and the restructuring," Gerhard Fasol of Eurotechnology Japan told the BBC.
"They have never gone through a fundamental restructuring since their formation, so there is some nervousness with the investors."
The bailout is being funded by a government-backed entity as well as some of the Renesas's key customers.
According to Renesas, Innovation Network Corporation of Japan, the government-backed fund and the biggest
contributor to the bailout, will pick up a 69% stake in the firm.
The key Renesas clients which are a part of the bailout - including Toyota, Nissan, Cannon and Panasonic - will also take stakes with Toyota owning 2.5% and Nissan 1.5% of the company.
"The fact that clients are putting up money is positive, since it means Renesas will be able to gain some business from them," said Akira Minamikawa, vice president at IHS iSuppli in Tokyo.
'Cornerstone of investment'
Renesas, one of the biggest chipmakers in the world, has been hurt by a variety of factors over the past few years.
It has faced increased competition from rivals, as well as a slowing global demand - the combination of which has seen a drop in chip prices and hurt profitability.
A strong Japanese currency - which makes its products more expensive to foreign buyers - has further added to its woes.
In a bid to turn around its fortunes, Renesas had previously said that it will move away from the production of system chips, used in televisions, mobile phones and personal computers.
It said it will shift its focus on developing more advanced microcontroller chips - which are mainly used in cars - and a segment in which it enjoys 27% share of the global market.
As it announced the bailout deal, Renesas affirmed that a large part of the new funding will be used to strengthen its microcontroller chip division.
"The cornerstone of investment in automotive semiconductor solutions will be sustaining future growth of automotive microcontroller units, for which we already have by far the leading global share," the firm said.
Renesas said it will use the funds to develop new products and to improve the efficiency of current production processes to boost profits.