Renesas Establishes International Procurement Department in Taiwan

6/9/2004 - Renesas Technology Corp., the world's number-one supplier of microcontrollers and a leader in security IC products announced to establish the company's first overseas international procurement department inside its wholly-owned sales company Renesas Technology Taiwan Co., Ltd., in order to improve the efficiency of global procurement and strengthen its relationship with local outsourcing companies. The new international procurement department will begin full-fledged business operations on July 1 2004.

Renesas Technology has conducted procurement outside Japan mainly through the overseas branches of Hitachi, Ltd. and Mitsubishi Electric Corporation, while Renesas Technology has, with the aim of achieving efficiency since its launch in April 2003, centralized purchasing at headquarters in Japan. However, the growth of overseas outsourcing and lower-priced devices applications has made it indispensable for Renesas Technology to own its overseas procurement department for further efficiency. Taiwan is the biggest market that drives outsourcing businesses comprising foundry, assembly, and testing operations. Renesas Technology expects to consign approximately 25% of its outsourcing business excluding that to the affiliated companies to Taiwanese companies in fiscal 2004. Since outsourcing of products such as AND flash memory will be starting and there will be a major expansion of procurement in Taiwan, Renesas Technology has decided to set up an international procurement department in Taiwan.

Renesas Technology is also carrying forward strategic alliances with other companies. Taiwanese outsourcing companies can provide cutting-edge technology products as well as mature products through the process of foundry, assembly, and testing operations. Having Renesas Technology's own procurement department in Taiwan will enable much closer communication with these companies from the standpoints of both manufacture and technology. It will also make it possible to centralize local product logistics control and to achieve streamlined operations and lower costs.

Renesas Technology will be moving ahead to the establishment of further procurement departments overseas, including China and Malaysia, for the purpose of constructing the procurement organization capable of responding promptly to market needs worldwide. An outline of the new Taiwan procurement department is given below.

Outline of International Procurement Department in Taiwan

Company name:
Renesas Technology Taiwan Co., Ltd.
International Procurement Department

10 th Floor No99 Fushing North Road, Taipei Taiwan

Start of business operations:
July 1, 2004

Procurement products:
Wafer foundry and assembly process outsourcing, testing outsourcing, semiconductor materials, etc.

Procurement plan:
Fiscal 2004 US$150,000,000 (estimate)
Fiscal 2005 US$200,000,000 (estimate)

About Renesas Technology Corp.
Renesas Technology Corp. designs and manufactures highly integrated semiconductor system solutions for mobile, automotive and PC/AV markets. Established on April 1, 2003 as a joint venture between Hitachi, Ltd. (TSE:6501, NYSE:HIT) and Mitsubishi Electric Corporation (TSE:6503) and headquartered in Tokyo, Japan, Renesas Technology is one of the largest semiconductor companies in the world and world leading microcontroller supplier globally. Besides microcontrollers, Renesas Technology offers system-on-chip devices, Smart Card ICs, mixed-signal products, flash memories, SRAMs and more.

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