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Fujitsu to Establish LSI Subsidiary

Fujitsu Limited

Tokyo, February 12, 2008

Fujitsu Limited announced today that it will reorganize its LSI business into a wholly owned subsidiary, Fujitsu Microelectronics Limited, to be incorporated through a company split on March 21, 2008. The decision was made at a Board of Directors meeting held today.

As a separate entity, the LSI business will undertake a range of reforms to raise its corporate value. With greater management independence, the subsidiary will implement a new management cycle aimed at accelerating its decision-making process. In addition, to strengthen its product offerings, the subsidiary will augment its mainstay ASIC(1) and COT(2) products with an expanded lineup of general-purpose products including ASSP(3) , microcontroller, and analog products, the market for which has grown rapidly in recent years, especially in Asia. Through these initiatives, Fujitsu Microelectronics will aim to increase the proportion of high value-added products among its offerings and build a stronger, more stable management foundation that can better adapt to change in the LSI industry.

1. Purpose of the Company Split

The core competencies of the LSI business include advanced process technologies, an abundant library of competitive intellectual property, design technologies for "first-shot full operation(4)" of system LSIs, and a strong customer base. Fujitsu has leveraged these competencies to develop a strong business foundation focused primarily on ASICs, COT, and a growing lineup of promising ASSP products, with software development capabilities as a key competitive component of the business.

In order to flourish amid intense competition and implement a strategic plan for growth, however, the LSI business requires greater independence and a new management structure which can facilitate the kind of rapid and timely decision-making needed to compete in the LSI industry. Under these circumstances, the Board of Directors made the decision on January 21, 2008 to pursue the reorganization of the LSI divisions into a separate entity.

As a result of detailed consideration on the structure of the LSI business, the Board of Directors made a decision today to split off the LSI business into a new, wholly owned subsidiary, Fujitsu Microelectronics Limited, to be incorporated on March 21, 2008.

As part of the company split, a number of LSI subsidiaries and affiliates, including subsidiary Fujitsu Electronics Inc., will become subsidiaries of Fujitsu Microelectronics. Fujitsu Component Limited, Shinko Electric Industries Co., Ltd., and Fujitsu Media Devices Inc., which manufacture electronic components, will remain Fujitsu Limited subsidiaries.

As a specialized LSI business, Fujitsu Microelectronics will adopt a new management cycle optimized for the industry. In addition to ASIC and COT products, which have been a mainstay of the LSI business, the subsidiary will seek to expand the lineup of ASSPs, microcontrollers, analog products and other general-purpose products, while enhancing its sales structure to focus on high-growth regions like Asia. These measures will enable the company to increase the proportion of high value-added products among its offerings and ensure a stable capacity utilization, which in turn will improve the profit structure.

As a management goal, Fujitsu Microelectronics plans to achieve a consolidated operating income margin of at least 5% for fiscal 2009 ending March 31, 2010.

2. Overview of Newly Incorporated Entity

(1) Corporate name Fujitsu Microelectronics Limited
(2) Business description Design, development, manufacturing, and sale of LSI products
(3) Date of establishment March 21, 2008 (current schedule)
(4) Location of head office Shinjuku Daiichi Seimei Bldg., 2-7-1 Nishi-Shinjuku, Tokyo, Japan
(5) Representative Toshihiko Ono, President & Representative Director
(6) Capital 60,000 million yen
(7) Fiscal year April 1 to March 31
(8) Shareholders Fujitsu Limited, 100% shareholder

  • [1] ASIC

    Application specific IC. Customized ICs for specific applications (customers).

  • [2] COT

    Customer-owned tooling. Refers to a business model in which LSIs designed and developed by the customer are manufactured by an LSI manufacturer. Unlike foundry manufacturing, the manufacturer co-develops with the customer from initial design stages.

  • [3] ASSP

    Application specific standard product. General-purpose products for specific applications, such as image processing and network-related processing.

  • [4] "First-shot full operation"

    Refers to first-try successful operation of an LSI from the initial prototype chip.

About Fujitsu

Fujitsu is a leading provider of customer-focused IT and communications solutions for the global marketplace. Pace-setting device technologies, highly reliable computing and communications products, and a worldwide corps of systems and services experts uniquely position Fujitsu to deliver comprehensive solutions that create infinite possibilities for its customers' success. Headquartered in Tokyo, Fujitsu Limited (TSE:6702) reported consolidated revenues of 5.1 trillion yen (US$43.2 billion) for the fiscal year ended March 31, 2007. For more information, please see: www.fujitsu.com

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Company and product names referenced herein are trademarks or registered trademarks of their respective owners. Information provided in this press release is accurate at time of publication and is subject to change without advance notice.

Date: 12 February, 2008
City: Tokyo
Company: Fujitsu Limited, , , , ,