Oct. 2002: HITACHI and MITSUBISHI to establish
RENESAS
To our valued Mitsubishi Electric customers:
As MITSUBISHI and HITACHI announced last March, MELCO (MITSUBISHI Electric Corp.) is moving forward in forming a joint venture for System LSI products with Hitachi. This new company will be called Renesas Technology Corporation. Mitsubishi will transfer its microcontrollers, application-specific standard products (ASSPs), application- specific integrated circuits (ASICs), SRAMs and Flash memories to Renesas. Also transferring are development, design, manufacturing, sales, and service.
In Japan, Renesas will commence operations on April 1, 2003, with overseas subsidiaries completed by March 2004 at the latest. Mitsubishi Electric will retain the opto electronic discrete and module, microwave and power semiconductor businesses will continue to aggressively market these products worldwide.
Due to the market realities in the DRAM business, Mitsubishi Electric will transfer its standard DRAM sales rights to Elpida Memory, Inc., effective April 1, 2003. In parallel, Elpida and Powerchip Semiconductor Corporation will forge an alliance in which Powerchip will serve as a standard DRAM foundry for Elpida. This move combines Mitsubishi's 2.6 percent 2001 global DRAM market share with Elpida's 8.5 percent share, to create a company with more than 11 percent DRAM market share and the world's fourth-ranked DRAM supplier.
Mitsubishi Electric will retain development, production, and sales of application-specific DRAMs, such as multi-chip package (MCP) devices, system-in-package (SiP) devices, and eRAM (embedded DRAM/ASIC) products. These application-specific DRAMs will subsequently transfer to Renesas. Mitsubishi Electric will discontinue its small signal transistor, hybrid IC and custom boards business by the end of March 2003. We will transfer the small signal transistor and hybrid IC business to Isahaya Electronics Corporation in Japan and custom board business to Miyoshi Electric, also in Japan.
Overall, we believe the move to create a System LSI joint venture with Hitachi will result in a strong, viable semiconductor company with economies of scale and combined resources to more effectively meet your long-term semiconductor technology needs. The joint venture will offer greater flexibility and faster response, more choice of products from a dynamic global supplier, more and diversified resources for expanded semiconductor R&D, and the stability of dealing with the world's top System LSI company. The transfer of DRAM sales rights to Elpida will provide the market with a major, focused DRAM supplier.
Please continue to conduct business with Mitsubishi Electric as you have been. Beginning immediately and over the next few months, my sales team will be working closely with you to ensure a seamless transition. Mitsubishi remains committed to providing you with the highest levels of technology, service, and satisfaction.
Sincerely, Y.Funada
President & COO Mitsubishi Electric Europe BV, Semiconductor Div.
