Renesas Electronics and Sony Sign Definitive Agreement to Transfer Semiconductor Manufacturing Facility and Equipment, etc.

  Renesas Electronics and Sony Sign Definitive Agreement to Transfer
  Semiconductor Manufacturing Facility and Equipment, etc.

Business Wire

SANTA CLARA, Calif. -- January 29, 2014

Renesas Electronics Corporation (“Renesas Electronics”, TSE: 6723) and Sony
Corporation (“Sony”, TSE: 6758) today announced that they have signed a
definitive agreement to transfer a semiconductor manufacturing facility and
related equipment (the “Asset Transfer") at the Tsuruoka Factory (12-inch
front-end wafer fabrication line of the semiconductor production facility) of
Renesas Yamagata Semiconductor Co., Ltd. (“Renesas Yamagata Semiconductor”), a
wholly-owned subsidiary of Renesas Electronics, to Sony Semiconductor
Corporation (“SCK”), a wholly-owned subsidiary of Sony.

1. Background of the Asset Transfer

As announced on August 2, 2013, in the news release “Renesas Electronics Shows
Direction of Renesas Group,” Renesas Electronics has been promoting the
realignment of Renesas Group’s manufacturing sites in Japan in an effort to
strengthen its financial base. As part of this process, Renesas Electronics is
working to maintain and strengthen its high-quality technology in the areas
where its strengths lie, such as flash MCUs (microcontrollers) and low-power
operation technologies, while concentrating and consolidating its front-end
facilities based on production efficiency and cost-to-performance ratio.

As announced on April 12, 2012, in the news release “Sony Transformation to
Revitalize Electronics Business, Generate Growth and Drive New Value
Creation,” Sony is positioning the imaging business as one of its core
electronics businesses. As part of this strategy, Sony has been exploring
opportunities to increase its production capacity for image sensors, a key
component used in mobile products such as smartphones and tablets, for which
increasing demand is anticipated.

Based on the background above, Renesas Electronics and Sony signed the Asset
Transfer Agreement today, under which a semiconductor manufacturing facility
and related equipment are expected to be transferred to SCK on March 31, 2014.
This Asset Transfer is subject to the receipt of necessary regulatory
approvals.

After the Asset Transfer, the system LSIs and others produced at the Tsuruoka
Factory will be produced there for Renesas Electronics by SCK on a contract
basis for a certain period of time as agreed by Renesas Electronics and Sony.
After expiration of that period, Renesas Electronics will shift the production
of the system LSIs to its Naka Factory or discontinue production, as Renesas
Electronics previously announced to its customers.

2. Overview of the Assets to be Transferred

                           The semiconductor manufacturing equipment as well
                           as incidental assets, such as land, buildings,
                           etc., at the Renesas Yamagata Semiconductor’s
                           Tsuruoka Factory (12-inch front-end wafer
Assets to be transferred  fabrication line of the semiconductor production
and their location         facility), as agreed by Renesas Electronics and
                           Sony

                           1-11-73, Takarada, Tsuruoka City, Yamagata
                           Prefecture, Japan
Book value                Estimated amount of book value as of the date of
                           the Asset Transfer is being evaluated
Transfer price            7.51 billion yen
                           Renesas Yamagata Semiconductor’s Tsuruoka Factory
Current status            (12 inch front-end wafer fabrication line of the
                           semiconductor production facility)

3. Overview of Renesas Electronics and Sony

(1) Company Name                       Renesas Electronics Corporation
(2) Location                           1753 Shimonumabe, Nakahara-ku,
                                        Kawasaki, Kanagawa Prefecture , Japan
(3) Representative                     Hisao Sakuta, Representative Director,
                                        Chairman and CEO
                                        Research, development, design,
(4) Operations                         manufacture, sale and servicing of
                                        semiconductor products
(5) Capital                            228.2 billion yen
                                        November 1, 2002
(6) Established                       
                                        (Started operations on April 1, 2010)
(7) Net Assets                         221.8 billion yen (As of September 30,
                                        2013)
(8) Total Assets                       796.2 billion yen (As of September 30,
                                        2013)
                                        Innovation Network Corporation of
                                        Japan: 69.15%

                                        Japan Trustee Services Bank, Ltd.
(9) Major Stockholders and Ownership    (Re-trust of Sumitomo Mitsui Trust
Ratios                                 Bank, Limited / NEC Corporation
                                        pension and severance payments Trust
(As of September 30, 2013)              Account): 8.11%

                                        Hitachi, Ltd.: 7.66%

                                        Mitsubishi Electric Corporation: 6.26%
                                        There is no capital relationship
                                        between Renesas Electronics and Sony
                                        required to be referred to herein.
                                        There is no capital relationship
                  Capital Ties         between Renesas Electronics’
                                        affiliates and affiliate companies and
                                        Sony’s affiliates and affiliate
                                        companies required to be referred to
                                        herein
                                        There is no personal relationship
(10) Relationship                       between Renesas Electronics and Sony
with Sony                               required to be referred to herein.
                                        There is no personal relationship
                  Personal Ties        between Renesas Electronics’
                                        affiliates and affiliate companies and
                                        Sony’s affiliates and affiliate
                                        companies required to be referred to
                                        herein
                  Business             Renesas Electronics supplies some
                  Relationship          semiconductor products to Sony
                  Status as a Related  Not applicable
                  Party

                                        
(1) Company Name                         Sony Corporation
(2) Location                             1-7-1 Konan, Minato-ku, Tokyo, Japan
                                          Kazuo Hirai
(3) Representative                      
                                          Representative Corporate Executive
                                          Officer, President and CEO
(4) Operations                           Manufacture and sale of electronics
                                          products and equipment
(5) Capital                              JPY 630,923 million (as of March 31,
                                          2013)
(6) Established                          May 7, 1946
(7) Net Assets                           JPY 2,681,178 million (consolidated)
                                          (as of March 31, 2013) (Note)
                                          JPY 14,206,292 million
(8) Total Assets                         (consolidated) (as of March 31,
                                          2013)
                                          1. Moxley and Co. LLC 5.64%

                                          2. Japan Trustee Services Bank, Ltd.
                                          (Trust Account) 5.17%
(9) Major Stockholders and Ownership
Ratios                                   3. The Master Trust Bank of Japan,
                                          Ltd. (Trust Account) 4.69%
(As of March 31, 2013)
                                          4. Goldman, Sachs & Co. Reg 2.30%

                                          5. SSBT OD05 Omnibus Account –
                                          Treaty Clients 2.25%
                                          There is no capital relationship
                                          between Renesas

                                          Electronics and Sony required to be
                    Capital Ties         referred to herein. There is no
                                          capital relationship between Renesas
                                          Electronics’ affiliates and
                                          affiliate companies and Sony’s
                                          affiliates and affiliate companies
                                          required to be referred to herein
(10)                                      There is no personal relationship
                                          between Renesas
Relationship with
Renesas Electronics                       Electronics and Sony required to be
                    Personal Ties        referred to herein. There is no
                                          personal relationship between
                                          Renesas Electronics’ affiliates and
                                          affiliate companies and Sony’s
                                          affiliates and affiliate companies
                                          required to be referred to herein
                    Business             Renesas Electronics supplies some
                    Relationship          semiconductor products to Sony
                    Status as a Related  Not applicable.
                    Party

(Note) Because Sony prepares its consolidated financial statements in
accordance with generally accepted accounting principles in the United States,
“total equity” is stated in place of “net assets”.

3. Timeline of the Asset Transfer

(1) Date of Asset Transfer Agreement: January 29, 2014

(2) Date of the Asset Transfer (planned): March 31, 2014

* This transfer is subject to the receipt of necessary regulatory approvals

4. Financial Outlook

(Renesas)

As a result of the Asset Transfer, Renesas Electronics expects to record the
difference between the expected transfer price and the book value of the
assets at the time of the transfer as an extraordinary loss in the third
quarter of the fiscal year ending March 31, 2014. However, the amount of book
value is currently being evaluated and will be disclosed once such amount is
confirmed.

Renesas Electronics intends to disclose the consolidated forecasts for the
third quarter of the fiscal year ending March 31, 2014 where the impact from
the Asset Transfer will be included once such impact is confirmed.

(Sony)

No material impact is anticipated on Sony's consolidated financial results for
the fiscal year ending March 31, 2014 as a result of the Asset Transfer.

Sony is currently evaluating its forecast of the consolidated financial
results for the fiscal year ending March 31, 2014 to take into account the
Asset Transfer and other factors that might affect such forecast.

In connection with the Asset Transfer, Sony today announced “Sony Establishes
Yamagata Technology Center to Increase Production Capacity for CMOS Image
Sensors”.

Information can be found at www.sony.net/SonyInfo/News/Press/201401/14-016E/

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 Sony Corporation

Sony Corporation is a leading manufacturer of audio, video, game,
communications, key device and information technology products for the
consumer and professional markets. With its music, pictures, computer
entertainment and online businesses, Sony is uniquely positioned to be the
leading electronics and entertainment company in the world. Sony recorded
consolidated annual sales of approximately $72 billion for the fiscal year
ended March 31, 2013. Sony Global Web Site: http://www.sony.net/

Contact:

Media Contacts:
Japan
Renesas Electronics Corporation
Kyoko Okamoto, + 81-3-6756-5555
kyoko.okamoto.sx@renesas.com
or
Sony Corporation
Corporate Communications
+ 81-3-6748-2200
 
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