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Regarding the Consolidation of System LSI Businesses in New Company

Tokyo, Apr 23, 2014 - (JCN Newswire) - Fujitsu Limited, Panasonic Corporation, and Development Bank of Japan, Inc. (DBJ) have signed a memorandum of understanding in which DBJ will make an investment and provide a line of credit for a new fabless company specializing in system LSI design and development which Fujitsu and Panasonic will jointly establish.

Aiming for the global development of Japan's system LSI industry, Fujitsu and Panasonic have been in discussions about establishing a new company with a new business model(1). Fujitsu and Panasonic have been considering the integration of the system LSI business and associated intellectual property of Fujitsu's wholly owned subsidiary, Fujitsu Semiconductor Limited, together with Panasonic's system LSI business and related intellectual property, with both Fujitsu and Panasonic receiving shares in the new company equivalent to the value of their respective contributions.

Based on the agreement reached so far, Fujitsu, Panasonic and DBJ have agreed that DBJ will make a maximum investment of 20.0 billion yen in equity capital in the new company and will provide a maximum credit line of 10.0 billion yen to the new company. As a result, at the time of the business integration, it is expected that the ratio of voting rights held in the new company by Fujitsu, Panasonic and DBJ will be 40%, 20%, and 40%, respectively. The new company will operate independently.

Once the three companies reach an agreement on the details, they are expected to sign a final agreement, aiming for the end of the first quarter of fiscal year 2014 ending March 31, 2015. After completing necessary procedures in various countries in accordance with local competition laws, the integration and start of business is scheduled to take place in the third quarter of fiscal 2014. In addition, the parties concerned are planning to submit a business plan in accordance with the Industrial Competitiveness Enhancement Act, which was signed into law on December 4, 2013.

Fujitsu, Panasonic, and DBJ, the three companies scheduled to be the shareholders of the new company, have agreed to name Yasuo Nishiguchi as its CEO. The former president and representative director of Kyocera Corporation, Mr. Nishiguchi has much experience in management of technology and in management within a variety of other business areas in the electronics industry. Since retiring from Kyocera, Mr. Nishiguchi has been working in outside director positions for a variety of companies and has contributed to the development of numerous of industries, even beyond the electronics industry, through consulting and lectures. Under the insightful leadership of Mr. Nishiguchi, it is expected that the new company, as a fabless semiconductor manufacturer, will focus its management resources on product planning, marketing, and development, and grow its business in global markets.

Fujitsu Semiconductor and Panasonic have been offering outstanding system LSI products and related solutions by capitalizing on their rich management resources in the system LSI business that include cutting-edge technology in video and imaging as well as networking fields, world-class human resources, intellectual property, and customer bases. The new company will consolidate these management resources of the two companies in order to make business profitable and will aim for an initial public offering (IPO) within several years of its establishment.

Plans for the new company include switching to a fabless business model, creating an optimal management structure for the business, integrating open innovation that utilizes outsourcing, and exerting the synergy of both Fujitsu and Panasonic and the resources they possess. In addition, the new company will place priority in technological areas with high growth potential such as cloud computing, big-data, and optical networks as well as in the fields of medical equipment and energy. In doing so, the new company will be providing added value to its customers as it attempts to expand into markets outside of Japan.

DBJ will provide risk money through its 'Fund for Japanese Industrial Competitiveness' as the new company will create new value which will in turn make Japan more competitive in the area of system LSI.

(1) Please refer to "Fujitsu and Panasonic to Consolidate System LSI Businesses in New Company," a press release issued February 7, 2013, by Fujitsu and Panasonic:

Fujitsu Press Release: http://www.fujitsu.com/global/news/pr/archives/month/2013/20130207-05.html

Panasonic Press Release: http://panasonic.net/ir/relevant/2013/en130207.pdf

About Panasonic

Panasonic Corporation is a worldwide leader in the development and engineering of electronic technologies and solutions for customers in residential, non-residential, mobility and personal applications. Since its founding in 1918, the company has expanded globally and now operates over 500 consolidated companies worldwide, recording consolidated net sales of 7.30 trillion yen for the year ended March 31, 2013. Committed to pursuing new value through innovation across divisional lines, the company strives to create a better life and a better world for its customers. For more information about Panasonic, please visit the company's website at http://panasonic.net/ .

Source: Panasonic

Tokyo Public Relations Office
Panasonic Corporation
Tel: +81-3-3574-5664 
Fax: +81-3-3574-5699

Panasonic News Bureau
Tel: +81-3-3542-6205 
Fax: +81-3-3542-9018

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