Renesas - the chips are down Imagine the PR pitch: "How about we show how vibrant corporate Japan is today by turning around a company whose name sounds like renaissance?" On Monday, shares in Renesas leapt nearly a third on news that a government fund and some blue-chip companies are considering a rescue. That comes on top of interest from KKR, the private equity group. A deal is one thing, a turnround is another. Few companies better embody the failures of Japan's past efforts to deal with ailing businesses. Formed from the lossmaking chip operations of Hitachi, Mitsubishi Electric and, since 2010, NEC, Renesas has not turned a net profit in seven years and only hopes to squeak an operating profit later this financial year. Yet it is not a lost cause. Take microcontrollers (tiny chip-sized computers), in which Renesas has a strong enough position that its production disruption following the Fukushima disaster brought swaths of the world car industry to a virtual standstill. Small wonder the likes of Toyota, as well as KKR, are keen on a rescue. A full-on fight for the shareholders of Renesas between the blunt profit-seeking of US private equity and the polite sweep-it-under-the-carpet attitude of Japanese business would be the best outcome. But Hitachi, Mitsubishi and NEC still hold nine tenths of Renesas. That makes its one-third share price pop look less like a vote in favour of a home rescue as a probable short squeeze. The shares leapt as much last month on news of KKR's interest. There are also suggestions that the home team's interest is as much to do with keeping out foreign private equity as saving a company once billed as a national champion. But this should not be about US methods versus Japanese practice, but how to profit from Japan's deserved reputation for high-tech precision industry. Renesas's history makes one thing clear; past tactics haven't worked.