TOKYO and 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 |
| (3) | Representative Director | Representative Director, President: Yasushi Akao Representative Director and Executive Managing Vice President: Masaki Kato |
| (4) | Major Operations | Research, development, design, 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) |
| (9) | Major Shareholders and Equity Ratio | Japan Trustee Services Bank, Ltd. 32.44% Hitachi, Ltd. 30.62% Mitsubishi Electric Corporation 25.05% NEC Corporation 3.02% |
| (10) | Relationships between Related Parties | |
| Capital Relationships | There is no capital relationship between Renesas Electronics and J-Devices required to be referred to herein. There is no capital relationship between affiliates of Renesas Electronics and J-Devices required to be referred to herein. | |
| Personnel Relationships | There is no personnel relationship between Renesas Electronics and J-Devices required to be referred to herein. There is no personnel relationship between affiliates of Renesas Electronics and J-Devices required to be referred to herein. | |
| Business Relationships | There is transaction related to outsourcing of semiconductor manufacturing from Renesas Electronics to J-Devices. There is no business relationship between affiliates of Renesas Electronics and J-Devices required to be referred to herein. |
|
| Status of Related Parties | Renesas Electronics is not deemed to be a related party of J-Devices. Affiliates of 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 |
| (4) | Major Operations | Back-end manufacturing of semiconductor 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) |
| (9) | Major Shareholders and Equity Ratio | Yoshifumi Nakaya, etc. (Note 1) 60.0% Amkor Technology Inc. 30.0% Toshiba Corporation 10.0% |
| (10) | Relationships between Related Parties | |
| Capital Relationships | There is no capital relationship between J-Devices and Renesas Electronics required to be referred to herein. There is no capital relationship between affiliates of J-Devices and Renesas Electronics required to be referred to herein. | |
| Personnel Relationships | There is no personnel relationship between J-Devices and Renesas Electronics required to be referred to herein. There is no personnel relationship between affiliates of J-Devices and Renesas Electronics required to be referred to herein. | |
| Business Relationships | There is transaction related to outsourcing of semiconductor manufacturing from J-Devices to Renesas Electronics. There is no business relationship between affiliates of J-Devices and Renesas Electronics required to be referred to herein. |
|
| Status of Related Parties | J-Devices is not deemed to be a related party of Renesas Electronics. Affiliates 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) delivers trusted embedded design innovation with complete semiconductor solutions that enable billions of connected, intelligent devices to enhance the way people work and live. A global leader in microcontrollers, analog, power and SoC products, Renesas provides comprehensive solutions for a broad range of automotive, industrial, infrastructure, and IoT applications that help shape a limitless future. Learn more at renesas.com. Follow us on LinkedIn, Facebook, Twitter, and YouTube.
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.
The content in the press release, including, but not limited to, product prices and specifications, is based on the information as of the date indicated on the document, but may be subject to change without prior notice.