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

SANTA CLARA, Calif. — (BUSINESS WIRE) — January 28, 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

Assets to be transferred and their location  

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 fabrication line of the semiconductor production 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
Current status   Renesas Yamagata Semiconductor’s Tsuruoka Factory (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
(4) Operations   Research, development, design, manufacture, sale and servicing of semiconductor products
(5) Capital   228.2 billion yen
(6) Established   November 1, 2002

(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)
(9) Major Stockholders and Ownership Ratios

(As of September 30, 2013)

  Innovation Network Corporation of Japan: 69.15%

Japan Trustee Services Bank, Ltd. (Re-trust of Sumitomo Mitsui Trust Bank, Limited / NEC Corporation pension and severance payments Trust Account): 8.11%

Hitachi, Ltd.: 7.66%

Mitsubishi Electric Corporation: 6.26%

(10) Relationship with Sony Capital Ties  

There is no capital relationship between Renesas Electronics and Sony required to be 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

Personal Ties  

There is no personal relationship between Renesas Electronics and Sony required to be 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 Relationship   Renesas Electronics supplies some semiconductor products to Sony
Status as a Related Party   Not applicable
 
(1) Company Name   Sony Corporation
(2) Location   1-7-1 Konan, Minato-ku, Tokyo, Japan
(3) Representative   Kazuo Hirai

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)
(9) Major Stockholders and Ownership Ratios

(As of March 31, 2013)

  1. Moxley and Co. LLC 5.64%

2. Japan Trustee Services Bank, Ltd. (Trust Account) 5.17%

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%

(10)

Relationship with Renesas Electronics

Capital Ties  

There is no capital relationship between Renesas

Electronics and Sony required to be 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

Personal Ties  

There is no personal relationship between Renesas

Electronics and Sony required to be 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 Relationship   Renesas Electronics supplies some semiconductor products to Sony
Status as a Related Party   Not applicable.

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