TDK and Renesas Electronics Sign Basic Agreement on Transfer of Renesas Electronics Subsidiary's Tsuruoka Factory

OREANDA-NEWS. TDK Corporation (“TDK”, TSE: 6762), Renesas Electronics Corporation (“Renesas Electronics”, TSE: 6723), and Renesas Semiconductor Manufacturing Co., Ltd. (“Renesas Semiconductor Manufacturing”), a wholly owned subsidiary of Renesas Electronics, today announced that they signed a basic agreement on November 27, 2015 under which Renesas Semiconductor Manufacturing's Tsuruoka Factory will be transferred to TDK. The three companies target to conclude a definitive agreement on the transfer by the end of February 2016, and are currently negotiating the details, including the handover date and the transfer (reemployment) of personnel currently employed at the Tsuruoka Factory.

In the news release “Renesas Electronics Shows Direction of Renesas Group,” announced on August 2, 2013, Renesas Electronics indicated its intentions for the Tsuruoka Factory (then the 5-inch front-end wafer fabrication line of Renesas Yamagata Semiconductor Co., Ltd's Tsuruoka Higashi Factory) as “planned to be closed in 2 or 3 years,” and plans were proceeding to close the factory by the end of the current fiscal year.

TDK, for its part, has identified the electronic components business based on magnetic materials technology as a core business. It considers its three priority markets to be the ICT market, which encompasses products such as smartphones that continue to be increasingly popular worldwide; the automotive market, which includes hybrid vehicles and electric vehicles; and the industrial equipment/energy market, which covers applications such as wind power generation and solar power generation. TDK is intensely focused on efforts to expand these businesses and their profitability through a concentration on the electronic components business targeted at these three markets. To assure future growth, TDK is working to take thin-film technology built up over many years for the manufacture of magnetic heads for hard disk drives and extend it laterally into electronic components. In order to respond in a timely manner to the vigorous demand of thin-film components that demonstrate the company's strengths centering the three priority markets, TDK decided to acquire Renesas Semiconductor Manufacturing's Tsuruoka Factory.

TDK approached Renesas and Renesas Semiconductor Manufacturing in early October of this year with a view toward acquiring the Tsuruoka Factory. The three parties were able to come to a meeting of minds, and as a result, a basic agreement regarding transfer of the Tsuruoka Factory was concluded. Negotiations on detailed conditions will continue with the aim of concluding a definitive agreement at a future date.

Overview of Tsuruoka Factory

About TDK Corporation

TDK Corporation is a leading electronics company based in Tokyo, Japan. It was established in 1935 to commercialize ferrite, a key material in electronic and magnetic products. TDK's portfolio includes electronic components, modules and systems* marketed under the product brands TDK and EPCOS, power supplies, magnetic application products as well as energy devices, flash memory application devices, and others. TDK focuses on demanding markets in the areas of information and communication technology and consumer, automotive and industrial electronics. The company has a network of design and manufacturing locations and sales offices in Asia, Europe, and in North and South America. In fiscal 2015, TDK posted total sales of USD 9.0 billion and employed about 88,000 people worldwide.