January 7, 2009
Asahi Kasei EMD Corp.
Asahi Kasei Corp.

Transfer of semiconductor business from Toko Inc.
Asahi Kasei EMD Corp. and Toko Inc. have today concluded a basic agreement for the phased transfer of Toko's semiconductor business to Asahi Kasei EMD beginning on April 1, 2009, and the establishment of a cooperative alliance to support the expansion and strengthening of business related to power management semiconductors.

Complementing its LSI business with the power management semiconductor business from Toko will enable Asahi Kasei EMD to achieve higher added value in its products, accelerate new product development, provide products and service more closely aligned with customer needs, and advance the global expansion of its operations.

The electronic devices business of Asahi Kasei EMD, in both LSIs and magnetic sensors, is a focus for strategic expansion under the Asahi Kasei Group's Growth Action – 2010 management initiative. The LSI business has grown with recognized world leadership in analog/digital mixed-signal technology featuring advanced analog circuit design, low power consumption, and high-precision signal processing, with applications centered on the fields of home electronics and mobile communications.

Demand for LSIs with higher performance is forecast to grow as consumer electronics products feature greater functionality, smaller size, and lower power consumption. To further increase the scale and heighten the competitiveness of its LSI business, Asahi Kasei EMD sought to integrate new IP cores and process technologies, increase product added value, and achieve the enhanced signal-processing performance required to expand business in automotive, industrial, and other strategic markets.

Toko, having developed operations on the twin pillars of coil products and semiconductors for audio-visual, mobile communications, computer, and automotive markets with a focus on power and RF applications, and having gained wide recognition among users for the optimum characteristics, economy, and convenience of its products, faced challenging market demands to invest management resources in new circuit design technology and enhanced wafer processing technology to meet emerging requirements for power management semiconductors featuring smaller size, greater digitalization, and higher efficiency. Having explored a range of strategic options to ensure the ongoing development and growth of each of its businesses over the intermediate term, including alliances and business portfolio reconfigurations, Toko concluded that a phased transfer to Asahi Kasei EMD together with a cooperative alliance offered the best prospects for its semiconductor business.

Recognizing the unique potential in such a business combination, Asahi Kasei EMD and Toko began discussions in summer 2008 which culminated in the agreement signed today. Asahi Kasei EMD found the IP cores and process technology of Toko's power management semiconductor business to be extremely promising, and the overseas customer relationships established by Toko to be particularly attractive. For Asahi Kasei EMD, principal advantages to be gained from today's agreement include the following:
  · Development of higher added-value products integrating IP cores from Toko.
  · Utilization of high-voltage process technology from Toko.
  · Expansion of overseas sales.
  · Reinforcement of manpower for analog circuit design.
Outline of the transfer and cooperative alliance
Operations subject to transfer:
  All semiconductor operations of Toko and its subsidiaries.
Method of transfer:
  1. Toko will assign all subject operations to its wholly owned wafer processing subsidiary Tateyama Device Inc. in accordance with Japanese legal provisions for partition and absorption as a form of corporate reorganization.
  2. Asahi Kasei EMD will acquire 80% of issued shares in Tateyama Device from Toko, and rename the company Asahi Kasei Toko Power Device Corp.
  3. Three years from the above (scheduled for April 1, 2009) Asahi Kasei EMD will acquire the remaining 20% of issued shares in Asahi Kasei Toko Power Device, making it a wholly owned subsidiary.
Overview of cooperative alliance:
  · Toko will perform sale of products from Asahi Kasei Toko Power Device through its established marketing network for a period of three years to ensure the smooth succession of customer relationships.
  · Asahi Kasei EMD and Toko will maintain a cooperative relationship through Asahi Kasei Toko Power Device to ensure that maximum synergies are gained between the semiconductor products business and Toko's core business in coil products.
  · Toko will support the smooth transition to an independent management configuration for Asahi Kasei Toko Power Device and an early achievement of synergies between the transferred operations and the established semiconductor operations of Asahi Kasei EMD.
Corporate profiles
Asahi Kasei EMD Corp.
  President: Makoto Konosu
  Head office: Tokyo, Japan
  Establishment: October 1, 2003
  Paid-in capital: ¥3 billion (as of March 31, 2008)
  Shareholding: 100% by Asahi Kasei Corp.
  Consolidated sales: ¥113.3 billion (year ended March 31, 2008)
  Employees: 2,603 (as of March 31, 2008)
  Main products:  
  Electronic devices - mixed-signal LSIs, magnetic sensors, fine pattern products
Electronic materials* - photosensitive polyimide precursor, dry film photoresist, glass fabric
  * Electronic materials operations are scheduled to transfer to Asahi Kasei E-materials Corp. on April 1, 2009.
Toko Inc.
  President: Shigeru Kawatsuhara
  Head office: Tokyo, Japan
  Establishment: August 9, 1955
  Paid-in capital: ¥16,446,219,300 (as of March 31, 2008)
  Consolidated sales: ¥58.8 billion (year ended March 31, 2008)
  Employees: 15,999 (as of March 31, 2008, consolidated)
  Main products:  
  Coil & related products, multilayer products, unit products, semiconductors (regulator ICs, LED driver ICs, DC/DC converters, diodes, etc.), ceramic products.
Tateyama Device Inc.
  President: Hisashi Iyota
  Head office: Tateyama, Chiba, Japan
  Establishment: January 26, 1999
  Paid-in capital: ¥100 million (as of March 31, 2008)
  Shareholding: 100% by Toko Inc
  Employees: 211 (as of March 31, 2008)
  Business line: Semiconductor wafer processing


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