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Renesas Electronics and J-Devices Sign Memorandum of Understanding on Transfer of Back-End Facilities

  Renesas Electronics and J-Devices Sign Memorandum of Understanding on
  Transfer of Back-End Facilities

Business Wire

TOKYO & USUKI, Japan -- January 30, 2013

Renesas Electronics Corporation (TSE: 6723, Renesas), a premier supplier of
advanced semiconductor solutions, and J-Devices Corporation (J-Devices) today
announced that they signed a Memorandum of Understanding today regarding the
transfer of the semiconductor back-end production business of three facilities
operated by Renesas’ wholly owned manufacturing subsidiaries (the Hakodate
Factory of Renesas Northern Japan Semiconductor, Inc. (Renesas Northern
Japan), the Fukui Factory of Renesas Kansai Semiconductor Co., Ltd. (SKS), and
the Kumamoto Factory of Renesas Kyushu Semiconductor Corp. (Renesas Kyushu))
and Renesas Northern Japan’s wholly owned subsidiary, Hokkai Electronics Co.,
Ltd. (Hokkai Electronics) to J-Devices.

This proposed transaction aims at building a long-term, mutually beneficial
relationship between the two companies as strategic partners in the
semiconductor production business. With today’s Memorandum of Understanding as
the basis, the two companies plan to negotiate a final agreement and to
complete the transfer in early June 2013. As the definitive terms of the
proposed transaction including the transfer method are currently being
negotiated, they are omitted from this press release. They will be announced
when definitive agreements are completed.

1. Background and Purpose of the Transfer
As announced on July 3, 2012, in “Renesas Electronics Announces the Direction
of Various Measures to Establish Robust and Profitable Structure,” Renesas is
proceeding with the restructuring of Renesas Group production facilities in
Japan in order to strengthen its revenue base. As part of this process, under
a production strategy in which the back-end facilities in Japan specialize in
production of high-value added products with increasing outsourcing ratio as
well as production ratio at Renesas overseas sites as a result, the Yonezawa
Factory of Renesas Northern Japan and the Oita Factory of Renesas
Semiconductor Kyushu Yamaguchi Co., Ltd. were to be maintained and
strengthened, and the Hakodate Factory of Renesas Northern Japan, the Fukui
Factory of SKS, and the Kumamoto Factory of Renesas Kyushu (the Hakodate
Factory, Fukui Factory, and Kumamoto Factory are referred to collectively
below as “the facilities to be transferred”) were to be “considered for
transfer within one year” in a process of selection and focus of business
operations. Accordingly, Renesas began looking for a transfer assignee with
whom it could expect to build a long-term partnership that would strengthen
the competitiveness of the facilities to be transferred and provide a
high-quality, reliable supply of products.

As Japan's largest independent company devoted to semiconductor assembly and
test operations for customers, J-Devices understands that, to further grow its
business, it must be cost-competitive with business rivals based outside of
Japan. To that end, J-Devices believes it is of the utmost importance to
expand the scale of its operations.

Against this background, Renesas and J-Devices came to a common understanding,
and as the first step in the building of a long-term partnership between the
two companies, a Memorandum of Understanding was reached today to transfer the
semiconductor back-end production business of the facilities to be transferred
and also Hokkai Electronics, which performs production support operations for
the Hakodate Factory, to J-Devices by early June of this year.

The current employees of the transferred facilities will be “on loan” to
J-Devices for a set period, under the premise that they will be reassigned to
J-Devices on the basis of individual agreements in future. The Renesas
products which will be manufactured at the facilities to be transferred will
continue to be supplied by Renesas to customers with the quality, delivery
schedules, service equal to or better than before even after the transfer.

In addition to the current seven facilities of J-Devices (Usuki, Oita
Prefecture (Headquarters); Kitsuki, Oita Prefecture (Headquarters functions);
Shibata-gun, Miyagi Prefecture; Aizuwakamatsu, Fukushima Prefecture; Miyawaka,
Fukuoka Prefecture; Oita, Oita Prefecture; and Satsumasendai, Kagoshima
Prefecture), the present transfer will add an additional three production
facilities. This will make J-Devices one of the world’s top five OSAT
(Outsourced Semiconductor Assembly and Test) service providers.

At the same time, the advantages gained as a long-term strategic partner of
Renesas, including larger business scale, fusion of technical capabilities,
and expanded product lineup, will enable J-Devices to improve cost
competitiveness, technical capabilities, and product quality, allowing it to
contribute to the continued development of the semiconductor industry as a
world-top-level OSAT service provider and also providing substantial benefits
for customers.

2. Overview of Renesas Electronics Corporation and J-Devices
(1)    Company Name              Renesas Electronics Corporation
(2)    Headquarters              1753 Shimonumabe, Nakahara-ku, Kawasaki,
                                     Kanagawa 211-8668, Japan
                                     Representative Director, President:
                                     Yasushi Akao
(3)    Representative Director  
                                     Representative Director and Executive
                                     Managing Vice President: Masaki Kato
                                     Research, development, design,
(4)    Major Operations          manufacture, sale, and servicing of
                                     semiconductor products
(5)    Capital Stock             153.2 billion yen (As of March 31, 2012)
(6)    Consolidated Sales        883.1 billion yen (For the fiscal year
                                     ended March 31, 2012)
(7)    Established               April 1, 2003
(8)    Employees                 41,900 (Consolidated, As of September 30,
                                     2012)
                                     Japan Trustee Services Bank, Ltd.32.44%

         Major Shareholders and      Hitachi, Ltd.30.62%
(9)    Equity Ratio             
                                     Mitsubishi Electric Corporation25.05%

                                     NEC Corporation3.02%
(10)   Relationships between Related Parties
                                     There is no capital relationship between
                                     Renesas Electronics and J-Devices
                                     required to be referred to herein. There
        Capital Relationships     is no capital relationship between
                                     affiliates of Renesas Electronics and
                                     J-Devices required to be referred to
                                     herein.
                                     There is no personnel relationship
                                     between Renesas Electronics and J-Devices
                                     required to be referred to herein. There
        Personnel Relationships   is no personnel relationship between
                                     affiliates of Renesas Electronics and
                                     J-Devices required to be referred to
                                     herein.
                                     There is transaction related to
                                     outsourcing of semiconductor
                                     manufacturing from Renesas Electronics to
                                     J-Devices.
        Business Relationships   
                                     There is no business relationship between
                                     affiliates of Renesas Electronics and
                                     J-Devices required to be referred to
                                     herein.
                                     Renesas Electronics is not deemed to be a
         Status of Related           related party of J-Devices. Affiliates of
      Parties                   Renesas Electronics are not deemed to be
                                     a related party of affiliates of
                                     J-Devices.
                               
(1)    Company Name              J-Devices Corporation
(2)    Headquarters              1913-2 Fukura, Usuki-shi, Oita, Japan
(3)    Representative Director   CEO: Yoshifumi Nakaya
                                     Back-end manufacturing of semiconductor
(4)    Major Operations          devices (Wafer test, Assembly and Final
                                     test)
(5)    Capital Stock             1.77 billion yen
(6)    Consolidated Sales        44.7 billion yen (For the fiscal year
                                     ended March 31, 2012)
(7)    Established               November 6, 1970
(8)    Employees                 3,684 (As of January 1, 2013)
                                     Yoshifumi Nakaya, etc. (Note 1) 60.0%
         Major Shareholders and
(9)    Equity Ratio              Amkor Technology Inc. 30.0%

                                     Toshiba Corporation 10.0%
(10)     Relationships between Related Parties
                                     There is no capital relationship between
                                     J-Devices and Renesas Electronics
                                     required to be referred to herein. There
        Capital Relationships     is no capital relationship between
                                     affiliates of J-Devices and Renesas
                                     Electronics required to be referred to
                                     herein.
                                     There is no personnel relationship
                                     between J-Devices and Renesas Electronics
                                     required to be referred to herein. There
        Personnel Relationships   is no personnel relationship between
                                     affiliates of J-Devices and Renesas
                                     Electronics required to be referred to
                                     herein.
                                     There is transaction related to
                                     outsourcing of semiconductor
                                     manufacturing from J-Devices to Renesas
                                     Electronics.
        Business Relationships   
                                     There is no business relationship between
                                     affiliates of J-Devices and Renesas
                                     Electronics required to be referred to
                                     herein.
                                     J-Devices is not deemed to be a related
         Status of Related           party of Renesas Electronics. Affiliates
      Parties                   of J-Devices are not deemed to be a
                                     related party of affiliates of Renesas
                                     Electronics.

Note 1: Existing shareholders who invested before the capital injection from
Amkor Technology Inc. and Toshiba Corporation.

3. Outline of the Facilities to be Transferred
(1)   Name               Hakodate Factory, Renesas Northern Japan
                             Semiconductor, Inc.
(2)   Location           145-1, Aza-Nakajima, Nanae-cho, Kameda-gun,
                             Hokkaido, Japan
(3)   Major operations   Semiconductor back-end production and contract
                             manufacturing service
(4)   Employees          Approximately 260 (As of January 1, 2013)
                       
(1)   Name               Fukui Factory, Renesas Kansai Semiconductor Co.,
                             Ltd.
(2)   Location           1 Ohmaki, Harue-cho, Sakai-shi, Fukui, Japan
(3)   Major operations   Semiconductor back-end production
(4)   Employees          Approximately 290 (As of January 1, 2013)
                       
(1)   Name               Kumamoto Factory, Renesas Kyushu Semiconductor
                             Corp.
(2)   Location           272-10, Oaza-Takaono, Ozu-machi, Kikuchi-gun,
                             Kumamoto, Japan
(3)   Major operations   Semiconductor back-end production and contract
                             manufacturing service
(4)   Employees          Approximately 270 (As of January 1, 2013)
                       
(1)   Name               Hokkai Electronics Co., Ltd.
(2)   Location           289-12, Higashi-cho, Yakumo-cho, Futami-gun,
                             Hokkaido, Japan
(3)   Major operations   Support business of semiconductor back-end
                             production
(4)   Employees          Approximately 60 (As of January 1, 2013)
                        

4. Schedule Moving Forward
End of February 2013 :  Conclusion of final agreement on the transfer
                         (scheduled)
Early June 2013      :   Date of the transfer (scheduled)
                         

5. Future Prospects
The effect of the transfer on the consolidated financial performance of
Renesas is not yet clear, and an announcement will be made as soon as it is
determined.


About Renesas Electronics Corporation

Renesas Electronics Corporation (TSE: 6723), the world's number one supplier
of microcontrollers, is a premiere supplier of advanced semiconductor
solutions including microcontrollers, SoC solutions and a broad-range of
analog and power devices. Business operations began as Renesas Electronics in
April 2010 through the integration of NEC Electronics Corporation (TSE: 6723)
and Renesas Technology Corp., with operations spanning research, development,
design and manufacturing for a wide range of applications. Headquartered in
Japan, Renesas Electronics has subsidiaries in 20 countries worldwide. More
information can be found at www.renesas.com.

About J-Devices Corporation

J-Devices is the largest independent semiconductor assembly and test company
in Japan with seven factories in Japan. The original company (named Nakaya
Microdevices) was established in 1970 and offers a broad lineup of packages
including thermally enhanced BGA, CMOS sensor, leadframe and other original
packages. J-Devices offers skilled package development as well as the full
turnkey "one stop" service such as wafer sort, assembly, and final testing for
consumer and automotive product.

Contact:

Renesas Electronics Corporation
Ai Kanehira, + 81-3-6756-5555
ai.kanehira.xw@renesas.com
or
J-Devices Corporation
Strategic Planning Department
+ 81-978-63-5432
 
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