Fujitsu to Consolidate Mobile Phone Manufacturing Subsidiaries

Tokyo, January 30, 2014 Fujitsu Limited today announced plans to integrate Fujitsu Mobile-phones Products Limited with Fujitsu Peripherals Limited, the two Japan-based companies that currently handle manufacturing, quality assurance, and repair of smartphones and feature phones (collectively referred to as "mobile phone handsets"). Mobile phone handset production is to be consolidated under Fujitsu Peripherals Limited, with a target date of April 1, 2014.

By bringing together the many years of expertise in development and manufacturing from the two companies, Fujitsu aims to increase productivity and create a highly flexible production facility agile enough to withstand volume fluctuations.

Background

As the world enters the "Internet of things" age in which everything is connected to the Internet, smartphones and other ubiquitous products will take many different forms and expand and penetrate into every market. Given this, Fujitsu aims to support a human centric intelligent society⁽¹⁾ in which ubiquitous products are positioned as the front-end interface to the customer in Fujitsu's vertically integrated business model. These products are regarded as a key component in providing a broad range of services to customers.

At the same time, as the smartphone market rapidly changes and as the border between smartphones and PCs blurs, Fujitsu believes that it is important to shift away from handset manufacturing that relies on conventional mass production. It is necessary to apply a quick and flexible approach that breaks the current mold of what a smartphone is and meets the needs of customers.

About the Consolidation Plans

Against this backdrop, Fujitsu has made the decision to consolidate Fujitsu Mobile-phones Products, which has focused on producing mobile phone handsets, with Fujitsu Peripherals, a manufacturer of ubiquitous products such as tablets, PC peripherals, and smartphones.

With this consolidation, Fujitsu will integrate the manufacturing technology and know-how of the two companies to create a production organization that leverages what is best about Japan's manufacturing by pursuing rigorous automation in the form of robotics and advanced ICT usage, from design through manufacturing. Together with implementation of a more efficient approach to product development, Fujitsu aims to double productivity from current levels.

Fujitsu is taking an open approach to its entire mobile phone business, in which development is increasingly shared and more efficient. By integrating these factories and strengthening its mobile phone business, Fujitsu will reallocate staff from throughout its mobile phone business to new areas, such as enterprise solutions and automotive-related businesses to promote its FUJITSU Mobile Initiative which aims to meet the diverse mobility needs of customers and society.

Through its vertically integrated business model, Fujitsu is providing customers its range of products and services, from mobile phones, network services and cloud services. This integration of companies will work to strengthen individual business platforms, and enable Fujitsu to further fortify its business as a whole and to meet the needs of customers by offering optimized products and services.

Mobile phone handset repair operations will continue to be run from the current Yashiro and Nasu locations, in the interests of ensuring quick service over the coverage area.

Impact on Financial Results (Consolidated and Non-consolidated)

After conducting a close analysis of the effects of this reorganization in its mobile phone operations, the company plans to record the financial impact of these measures in its fourth-quarter earnings.