SON: Sony Corporation: Renesas Electronics and Sony Sign Definitive Agreement to Transfer Semiconductor Manufacturing Facility

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

UK Regulatory Announcement

TOKYO

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

TOKYO, Japan, 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
Assets to be         (12-inch front-end wafer fabrication line of the
transferred         semiconductor production facility), as agreed by Renesas
and their location   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 (12
Current status       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%

(9) Major Stockholders             Japan Trustee Services Bank, Ltd.
and Ownership Ratios               (Re-trust of Sumitomo Mitsui Trust Bank,
(As of September 30, 2013)         Limited / NEC Corporation pension and
                                   severance payments Trust 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 between
                   Capital Ties   Renesas Electronics’

                                   affiliates and affiliate companies and
                                   Sony’s

                                   affiliates and affiliate companies
                                   required to be referred to

                                   herein
                                   There is no personal relationship between
(10) Relationship                  Renesas
with Sony
                                   Electronics and Sony required to be
                                   referred to herein.

                                   There is no personal relationship between
                    Personal       Renesas
                    Ties
                                   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)
(8) Total Assets              JPY 14,206,292 million (consolidated) (as of
                              March 31, 2013)
                              1. Moxley and Co. LLC
                              5.64%

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

                              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 referred to
                              herein.

                              There is no capital relationship between
              Capital Ties   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                          Electronics and Sony required to be referred to
Renesas                       herein.
Electronics
                              There is no personal relationship between
               Personal       Renesas
               Ties
                              Electronics’ affiliates and affiliate companies
                              and Sony’s

                              affiliates and affiliate companies required to
                              be referred to

                              herein
               Business       Renesas Electronics supplies some semiconductor
               Relationship   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/

Contact:

Sony Corporation
 
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