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Renesas Electronics Reaches a Definitive Agreement to Transfer its Subsidiaries' Back-End Facilities and Others to J-Devices

TOKYO, Japan, March 19, 2013 — Renesas Electronics Corporation (TSE:6723, “Renesas”), a premier supplier of advanced semiconductor solutions, today announced that Renesas and J-Devices Corporation (“J-Devices”) signed a definitive agreement (“DA”) to transfer Renesas subsidiaries' back-end facilities and others to J-Devices following a Memorandum of Understanding which was announced on January 30, 2013 in the news release “Renesas Electronics and J-Devices Sign Memorandum of Understanding on Transfer of Back-End Facilities”.

 

In this transfer, Renesas defines its wholly owned subsidiaries, Renesas Northern Japan Semiconductor, Inc. (“Renesas Northern Japan”), Renesas Kansai Semiconductor Co., Ltd. (“SKS”), Renesas Kyushu Semiconductor Corp. (“Renesas Kyushu”) and Renesas Northern Japan's wholly owned subsidiary, Hokkai Electronics Co., Ltd. (“Hokkai Electronics”) as “splitting companies in absorption-type split”. Through an absorption-type corporate split (“the corporate split”) Renesas will transfer assets, debts, other rights and obligations related to partial back-end production business of the splitting companies in absorption-type split (back-end production business of the Hakodate Factory of Renesas Northern Japan and the Fukui Factory of SKS, back-end production business and contract manufacturing service of the Kumamoto Factory of Renesas Kyushu, and production support business of Hokkai Electronics: referred to collectively below as “the business to be transferred”) to a wholly owned subsidiary that Renesas will newly establish. Then Renesas will transfer all issued shares of the subsidiary to J-Devices (This transfer is referred to below as “the transfer”).

 

The DA aims at building a long-term, mutually beneficial relationship between Renesas and J-Devices as strategic partners in the semiconductor production business. With today's agreement as the basis, the two companies intend to complete the transfer on June 1, 2013.

 

I. Purpose of the Corporate Split and 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 business to be transferred this time 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 business to be transferred and provide a high-quality, reliable supply of products.

 

On the other hand, as a company devoted to semiconductor assembly and test operations for customers, J-Devices believed it is of the utmost importance to expand the scale of its operation in order to strengthen cost competitiveness required for the further business growth.

 

Against this background, Renesas and J-Devices came to a common understanding, and reached the DA regarding the business to be transferred to J-Devices on June 1, 2013.

 

The Renesas products, which are related to the business 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.

 

As previously mentioned, Renesas will transfer assets, debts, other rights and obligations related to the business to be transferred to a wholly owned subsidiary that Renesas will newly establish. Then Renesas will transfer all issued shares of the subsidiary to J-Devices. The overview of the subsidiary is as follows.

 

II. Establishment of the Subsidiary

1. Purpose of the Establishment of the Subsidiary (Successor Company in Absorption-Type Split)

As part of the transfer, Renesas intends to integrate the business to be transferred into Renesas J Semiconductor Corporation (“successor company in absorption-type split”), which Renesas will newly establish as its wholly owned subsidiary.

 

2. Overview of the Subsidiary to be Established in April 2013 as a Successor Company in Absorption-Type Split

Company Name Renesas J Semiconductor Corporation
Location 2-6-2, Ote-machi, Chiyoda-ku, Tokyo 100-0004, Japan
Representative Akira Furuki, Representative Director and President
Major Operations Research, development, design, manufacture and sale of electronic products
Capital 1 million yen

III. The Corporate Split

1. Outline of the Corporate Split

  • (1)  Timeline for the Corporate Split

    Approval of the splitting companies in absorption-type split for the corporate split agreement: April 2013 (planned)
    Approval of the successor company in absorption-type split for the corporate split agreement: April 2013 (planned)
    Signing of the corporate split agreement: April 2013 (planned)
    Approval of shareholders' meetings of the splitting companies in absorption-type split for the corporate split: May 2013 (planned)
    Approval of shareholders' meeting of the successor company in absorption-type split for the corporate split: May 2013 (planned)
    Effective date of the corporate split: June 1, 2013 (planned)


  • (2)  Method of the Corporate Split

    Renesas Northern Japan, SKS, Renesas Kyushu and Hokkai Electronics will be the splitting companies in absorption-type split and Renesas J Semiconductor Corporation will be the successor company in absorption-type split.


  • (3)  Share Allocation in Accordance with the Corporate Split

    <Corporate split of Renesas Kyushu>
    Upon the corporate split, the successor company in absorption-type split will issue 3,000 common stocks and will allocate all of them to Renesas Kyushu, a splitting company in absorption-type split. In addition, Renesas Kyushu will allocate all the shares as dividend of surplus to its wholly owning parent company, Renesas.

    <Corporate split of other three companies (Renesas Northern Japan, SKS, and Hokkai Electronics)>
    Upon the corporate split, allocation of shares, cash and other property is not scheduled.


  • (4)  Share Subscription Rights and Bonds with Share Subscription Rights

    The splitting companies in absorption-type split have not issued share subscription rights and bonds with share subscription rights.


  • (5)  Rights and Obligations Transferred to the Successor Company

    Capital of the splitting companies in absorption-type split will not be changed following the corporate split while capital of the successor company in absorption-type split will be increased by 300 million yen resulting from the corporate split of Renesas Kyushu.


  • (6) Rights and Obligations Transferred to the Successor Company

    The successor company in absorption-type split will acquire assets, debts, other rights and obligations of the business to be transferred on the effective date of the corporation split based on the corporate split agreement with the splitting companies in absorption-type split. The transfer will be undertaken with the method of noncumulative taking of obligation.


  • (7) Ability to Fulfill Obligations

    Renesas concludes that both the splitting companies and the successor company in absorption-type split shall have abilities to fulfill all their debt obligations on and after the effective date of the corporate split.


2. Overview of the Splitting Companies and the Successor Company

  Splitting Company 1Successor Company
(1)Company NameRenesas Northern Japan Semiconductor, Inc.Renesas J Semiconductor Corporation
(2)Location145, Aza-Nakajima, Nanae-cho, Kameda-gun, Hokkaido, 041-1196, Japan2-6-2, Ote-machi, Chiyoda-ku, Tokyo 100-0004, Japan
(3)RepresentativeKosuke Tanaka, Representative Director and PresidentAkira Furuki, Representative Director and President
(4)Major OperationsResearch, development, design, manufacture and sale of semiconductor and IC productsResearch, development, design, manufacture and sale of electronic products
(5)Capital2,550 million yen1 million yen
(6)EstablishedMay 30, 1970April, 2013 (planned)
(7)Number of Shares Issued6,648,000
(8)Fiscal TermMarch 31March 31
(9)Employees
(10)Main Client
(11)Main Bank
(12)Major Shareholders and Equity RatioRenesas Electronics Corporation 100%Renesas Electronics Corporation 100%
(13)The financial results and financial position of the splitting company for the past three years
Accounting PeriodFiscal year ended March 2010Fiscal year ended March 2011Fiscal year ended March 2012
 Net Asset9,380 million yen9,827 million yen8,031 million yen
 Total Asset31,335 million yen30,421 million yen31,117 million yen
 Net Asset Per Share1,410.88 yen1,478.16 yen1,208.06 yen
 Net Sales44,318 million yen48,562 million yen41,536 million yen
 Operating Income1,162 million yen2,143 million yen-814 million yen
 Ordinary Income1,043 million yen2,064 million yen-885 million yen
 Net Income1,901 million yen447 million yen-1,796 million yen
 Net Income Per Share285.94 yen67.27 yen-270.09 yen
 Dividends Per Share
  Splitting Company 2Successor Company
(1)Company NameRenesas Kansai Semiconductor Co., Ltd.Renesas J Semiconductor Corporation
(2)Location2-9-1 Seiran, Otsu-shi, Shiga 520-8555, Japan2-6-2, Ote-machi, Chiyoda-ku, Tokyo 100-0004, Japan
(3)RepresentativeYasuhiro Funakoshi, Representative Director and PresidentAkira Furuki, Representative Director and President
(4)Major OperationsResearch, development, design, manufacture and sale of semiconductor and IC productsResearch, development, design, manufacture and sale of electronic products
(5)Capital1,000 million yen1 million yen
(6)EstablishedJuly 1, 1983April, 2013 (planned)
(7)Number of Shares Issued20,000
(8)Fiscal TermMarch 31March 31
(9)Employees
(10)Main Client
(11)Main Bank
(12)Major Shareholders and Equity RatioRenesas Electronics Corporation 100%Renesas Electronics Corporation 100%
(13)The financial results and financial position of the splitting company for the past three years
Accounting PeriodFiscal year ended March 2010Fiscal year ended March 2011Fiscal year ended March 2012
 Net Asset1,871 million yen1,866 million yen560 million yen
 Total Asset56,987 million yen53,309 million yen45,524 million yen
 Net Asset Per Share93,555.32 yen93,312.14 yen28,016.53 yen
 Net Sales85,991 million yen68,065 million yen55,121 million yen
 Operating Income7,641 million yen1,547 million yen582 million yen
 Ordinary Income6,540 million yen184 million yen-639 million yen
 Net Income3,584 million yen-3.7 million yen-1,307 million yen
 Net Income Per Share179,219.92 yen-185.74 yen-65,325.00 yen
 Dividends Per Share
Splitting Company 3 Successor Company
(1) Company Name Renesas Kyushu Semiconductor Corp. Renesas J Semiconductor Corporation
(2) Location 272-10, Oaza-Takaono, Ozu-machi, Kikuchi-gun, Kumamoto, 869-1232, Japan 2-6-2, Ote-machi, Chiyoda-ku, Tokyo 100-0004, Japan
(3) Representative Director Akira Furuki, Representative Director and President Akira Furuki, Representative Director and President
(4) Major Operations Research, development, design, manufacture and sale of semiconductor and IC products Research, development, design, manufacture and sale of electronic products
(5) Capital 500 million yen 1 million yen
(6) Established August 1, 1991 April, 2013 (planned)
(7) Number of Shares Issued 7,000
(8) Fiscal Term March 31 March 31
(9) Employees
(10) Main Client
(11) Main Bank
(12) Major Shareholders and Equity Ratio Renesas Electronics Corporation 100% Renesas Electronics Corporation 100%
(13) The financial results and financial position of the splitting company for the past three years
Accounting Period Fiscal year ended March 2010 Fiscal year ended March 2011 Fiscal year ended March 2012
Net Asset 1,494 million yen 1,747 million yen 1,124 million yen
Total Asset 20,863 million yen 22,012 million yen 18,232 million yen
Net Asset Per Share 213,396.76 yen 249,618.47 yen 160,634.74 yen
Net Sales 31,506 million yen 30,890 million yen 24,791 million yen
Operating Income 471 million yen 572 million yen -348 million yen
Ordinary Income 367 million yen 468 million yen -493 million yen
Net Income 241 million yen 253 million yen -623 million yen
Net Income Per Share 34,447.75 yen 36,221.71 yen -88,983.73 yen
Dividends Per Share
Splitting Company 4 Successor Company
(1) Company Name Hokkai Electronics Co., Ltd. Renesas J Semiconductor Corporation
(2) Location 289-12, Higashi-cho, Yakumo-cho, Futami-gun, Hokkaido, 049-3102, Japan 2-6-2, Ote-machi, Chiyoda-ku, Tokyo 100-0004, Japan
(3) Representative Keiichi Nakamura, Representative Director and President Akira Furuki, Representative Director and President
(4) Major Operations Manufacture and sale of IC products Research, development, design, manufacture and sale of electronic products
(5) Capital 20 million yen 1 million yen
(6) Established November 2, 1978 April, 2013 (planned)
(7) Number of Shares Issued 400
(8) Fiscal Term March 31 March 31
(9) Employees
(10) Main Client
(11) Main Bank
(12) Major Shareholders and Equity Ratio Renesas Northern Japan Semiconductor, Inc. 100% Renesas Electronics Corporation 100%
(13) The financial results and financial position of the splitting company for the past three years
Accounting Period Fiscal year ended March 2010 Fiscal year ended March 2011 Fiscal year ended March 2012
Net Asset 62 million yen 70 million yen 75 million yen
Total Asset 215 million yen 210 million yen 198 million yen
Net Asset Per Share 156,517.50 yen 175,405.00 yen 188,185.00 yen
Net Sales 308 million yen 310 million yen 262 million yen
Operating Income 13 million yen 20 million yen 18 million yen
Ordinary Income 16 million yen 20 million yen 16 million yen
Net Income 3 million yen 7 million yen 5 million yen
Net Income Per Share 8,139.99 yen 18,888.64 yen 12,779.84 yen
Dividends Per Share

3. Overview of the Business to be Carved out through the Corporate Split

  • (1) Business to be Carved out

    Hakodate Factory of Renesas Northern Japan: Semiconductor back-end production business Fukui Factory of SKS: Semiconductor back-end production business Kumamoto Factory of Renesas Kyushu: Semiconductor back-end production business and contract manufacturing service Hokkai Electronics: Support business of semiconductor back-end production

(2) Financial Results of Divisions to be Carved out

A. Hakodate Factory of Renesas Northern Japan
 Fiscal year ended March 2011Fiscal year ended March 2012
Sales*25,782 million yen30,960 million yen
B. Fukui Factory of SKS
 Fiscal year ended March 2011Fiscal year ended March 2012
Sales*35,017 million yen25,422 million yen
C. Kumamoto Factory of Renesas Kyushu
 Fiscal year ended March 2011Fiscal year ended March 2012
Sales*50,208 million yen56,293 million yen
D. Hokkai Electronics
 Fiscal year ended March 2011Fiscal year ended March 2012
Sales*310 million yen262 million yen
*Above sales include the value of chips and others which Renesas provides to each splitting company for profit.

 

(3) List of Assets and Liabilities to be Carved out and their Book Values (As of March 31, 2012)

A. Hakodate Factory of Renesas Northern Japan
ItemBook ValueItemBook Value
AssetsLiabilities
Current Assets624 million yenCurrent Liabilities6 million yen
Fixed Assets4,195 million yenFixed Liabilities3 million yen
Total4,819 million yenTotal9 million yen
B. Fukui Factory of SKS
ItemBook ValueItemBook Value
AssetsLiabilities
Current Assets1,213 million yenCurrent Liabilities1 million yen
Fixed Assets4,869 million yenFixed Liabilities0 million yen
Total6,082 million yenTotal1 million yen
C. Kumamoto Factory of Renesas Kyushu
ItemBook ValueItemBook Value
AssetsLiabilities
Current Assets1,909 million yenCurrent Liabilities0 million yen
Fixed Assets9,911 million yenFixed Liabilities44 million yen
Total11,820 million yenTotal44 million yen
D. Hokkai Electronics
ItemBook ValueItemBook Value
AssetsLiabilities
Current Assets0 million yenCurrent Liabilities0 million yen
Fixed Assets2 million yenFixed Liabilities0 million yen
Total2 million yenTotal0 million yen
* After March 31, 2012, the splitting companies had 7 billion yen of fixed liability of which Renesas becomes the creditor. 7 billion of fixed liability has the equivalent effect as the future payment for the transferred company.

 

4. Status of the Splitting Companies and the Successor Company Following the Corporate Split

  • (1) Status of the Splitting Companies

    There will be no changes to company names, major operations, capital and fiscal terms of the splitting companies (Renesas Northern Japan, SKS, Renesas Kyushu and Hokkai Electronics) following the corporate split. Representatives and locations of the companies are subject to change.

(2) Status of the Successor Company (Planned to be Established in April 2013)

Company Name*1 Renesas J Semiconductor Corporation
Location*1 2-6-2, Ote-machi, Chiyoda-ku, Tokyo 100-0004, Japan
Representative Akira Furuki, Representative Director and President
Major Operations Research, development, design, manufacture and sale of electronic products
Capital*2 301 million yen
Fiscal Term March 31
Net Asset Not fixed yet at the moment
Total Asset Not fixed yet at the moment
  • Note 1: 

    The successor company's name and location will be changed on the effective date of the transfer. (The name is scheduled to change to J-Devices Semiconductor Corporation.)


  • Note 2: 

    The successor company's capital will be increased by 300 million yen following the corporate split.

5. Financial Outlook

The splitting companies and the successor company in absorption-type split are wholly owned subsidiaries of Renesas, thereby there will be no impact to Renesas' consolidated financial results.

 

IV. The Transfer

1. Purpose of the Transfer

Please refer to “I. Purpose of the Corporate Split and the Transfer”. The transfer will be completed on condition that the corporate split, which was previously mentioned in “III. The Corporate Split”, will be come into force.

 

2. Overview of a Subsidiary (Renesas J Semiconductor Corporation) to be Transferred

(1)Company Name*1Renesas J Semiconductor Corporation
(2)Location*12-6-2, Ote-machi, Chiyoda-ku, Tokyo 100-0004, Japan
(3)Representative*1Akira Furuki, Representative Director and President
(4)Major OperationsResearch, development, design, manufacture and sale of electronic products
(5)Capital*2301 million yen
(6)EstablishedApril 2013 (planned)
(7)Major Shareholders and Equity RatioRenesas Electronics Corporation 100%
(8)Relationships between Related PartiesCapital RelationshipsThis company will be a Renesas’ wholly owned consolidated subsidiary to be established in April 2013.
Personnel RelationshipsThere is no personnel relationship between Renesas and this company required to be referred to herein. A representative director of Renesas Kyushu, a Renesas subsidiary, will concurrently serve as a representative director of this company.
Business RelationshipsThere is no business relationship between Renesas and this company required to be referred to herein.
(9)The financial results and financial position of the company for the past three years*3
Accounting PeriodFiscal year ended March 2012Fiscal year ended March 2011Fiscal year ended March 2010
 Net Asset
 Total Asset
 Net Asset Per Share
 Net Sales
 Operating Income
 Ordinary Income
 Net Income
 Net Income Per Share
 Dividends Per Share
  • Note 1: 

    The company's name, location and representative will be changed on the effective date of the transfer. (The name is scheduled to change to J-Devices Semiconductor Corporation.)


  • Note 2: 

    The company's capital will be increased by 300 million yen following the corporate split.


  • Note 3: 

    Since the company is planned to be established in April 2013, no financial results and financial position for the past three years are available.

3. Overview of the Transferee

(1) Company Name J-Devices Corporation
(2) Location 1913-2 Fukura, Usuki-shi, Oita, Japan
(3) Representative CEO: Yoshifumi Nakaya
(4) Major Operations Back-end manufacturing of semiconductor devices (Wafer test, Assembly and Final test)
(5) Capital 1.77 billion yen
(6) Established November 6, 1970
(7) Net Asset 7.3 billion yen
(8) Total Asset 27.4 billion yen
(9) Major Shareholders and Equity Ratio Yoshifumi Nakaya, etc.*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 Renesas and J-Devices required to be referred to herein. There is no capital relationship between affiliates of Renesas and J-Devices required to be referred to herein.
Personnel Relationships There is no personnel relationship between Renesas and J-Devices required to be referred to herein. There is no personnel relationship between affiliates of Renesas and J-Devices required to be referred to herein.
Business Relationships There is no business relationship between Renesas and J-Devices required to be referred to herein. There is no business relationship between affiliates of Renesas and J-Devices required to be referred to herein.
Status of Related Parties Renesas is not deemed to be a related party of J-Devices. Affiliates of Renesas are not deemed to be a related party of affiliates of J-Devices.
  • Note 1: 

    Existing shareholders who invested before the capital injection from Amkor Technology Inc.

4. Number of Shares to be Transferred, Transfer Price, and Status of Shares after the Transfer

(1) Shares before the Transfer 3,010
(Number of voting rights: 3,010)
(Ratio of voting rights: 100%)
(2) Shares to be Transferred 3,010
(Number of voting rights: 3,010)
(3) Transfer Price 4.8 billion yen (Value of common stocks of the successor company)

Note: After March 31, 2012, the splitting companies had 7 billion yen of fixed liability of which Renesas becomes the creditor. 7 billion of fixed liability has the equivalent effect as the future payment for the transferred company.
(4) Shares after the Transfer 0
(Number of voting rights: 0)
(Ratio of voting rights: 0%)

5. Timeline for the Transfer

Approval of Board of the Directors for the share transfer agreement: March 19, 2013

Signing of the share transfer agreement: March 19, 2013

Date of the share transfer: June 1, 2013 (planned)

 

6. Financial Outlook

Renesas recorded 7 billion yen impairment loss from reduced book values of tangible and intangible fixed assets and others related to the business to be transferred in the third quarter of the fiscal year ending March 31, 2013. Thus the impact from the transfer is already counted into Renesas' financial forecasts for the fiscal year ending March 31, 2013.

About Renesas Electronics Europe

Renesas delivers trusted embedded design innovation with complete semiconductor solutions that enable billions of connected, intelligent devices to enhance the way people work and live – securely and safely. The number one global supplier of microcontrollers, and a leader in A&P and SoC products, Renesas provides the expertise, quality, and comprehensive solutions for a broad range of Automotive, Industrial, Home Electronics (HE), Office Automation (OA) and Information Communication Technology (ICT) applications to help shape a limitless future.

Renesas was established in 2010 and is headquartered in Japan. With over 800 hardware and software alliance partners worldwide, it has the industry’s largest local support network. Renesas Electronics’ European structure is comprised of two business groups – automotive and industrial – as well as the global ADAS solution group and the engineering group.

Further information about Renesas Electronics Europe is available at at www.renesas.com.
Renesas Electronics Europe is also on social media at http://twitter.com/Renesas_Europe, http://facebook.com/RenesasEurope and http://youtube.com/RenesasPresents.


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.

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