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Fuji Electric Group to Realign Its Electronic Device Segment —Aiming to create new businesses in the area of energy and environment and accelerate overhaul of the magnetic disk business—

June 18,2009
Fuji Electric Holdings Co., Ltd.

Fuji Electric Holdings Co., Ltd. (FHC) (President: Haruo Ito; Headquarters: Shinagawa-ku, Tokyo) announced today that it would transfer semiconductor and photoconductor business units of Fuji Electronic Device Technology Co., Ltd. (FDT), one of its core operating companies, to Fuji Electric Systems Co., Ltd. (FES), its another core operating company, on October 1, 2009, in order to accelerate reinforcement of energy and environment businesses.

Upon completion of the transfer, FDT will become a specialized manufacturing company in the area of magnetic disks. Overhaul of the magnetic disk segment is the highest priority of the group. To this end, President Ito of FHC, the group CEO, will also act as president of FDT and run the operation from the perspective of the entire group with strong execution power.

Also, Fuji Electric Advanced Technology Co., Ltd. (FAT), the group’s R&D subsidiary, will be merged to FHC on October 1, 2009 in order to align technology development with group strategy. Through this merger, the Fuji Electric Group will accelerate development of the elemental technologies that can contribute to energy saving and environment as well as research and development activities that directly lead to commercialization of new products.

1. Objectives

(1) Deliver the highest customer satisfaction through integration of management resources

(a) Offer the comprehensive solutions that help energy-saving and environmental protection
The Fuji Electric Group has recently shifted its focus to energy and environment fields. To increase the capability to propose the solutions that help energy-saving and environmental protection, the group will create new comprehensive systems comprised of semiconductors, motors, control equipment and other components in which the group has competitive advantages, by integrating power electronics core technologies of each FES and FDT. In addition to the conventional sales of stand-alone products, the group will also enhance integrated solution sales that cover from devices and components to system plants to offer solutions that best fit with each customer's needs.
(b) Provide the integrated products built on power devices
The Fuji Electric Group will consolidate its technology development units to integrate development of power electronics technology, one of the group's core technologies, and that of power device technology.

Specifically, it is important for the group to increase competitive strength of the power electronics products in its fields of focus, including solar power generation systems, green IDCs, and railway and transportation solutions. To achieve this goal, the Fuji Electric Group will develop products and systems that leverage power devices to provide the integrated products incorporating devices, components and systems best suited to each customer's needs.

(2) Align Technology Development with Group Management Strategy

Driving the growth of energy and environment businesses is the group's most important strategy. To this end, the group will align technology development with management strategy. By carrying out the development necessary to accomplish the strategy in the research and development organization within the holding company, R&D expenses will be funded more rapidly and spent more effectively from the group management perspective. This will result in an optimal distribution of the group's technology resources and an increase in investment efficiency.

Key R&D Themes

Develop high-efficiency power conversion technology by fusing power device and power electronics technologies, and create new products by applying the developed technology to power supply systems.
Develop optimal energy control systems that comprehensively manage use of thermal energy and electric energy for green IDCs.
Increase power conversion efficiency of its film substrate solar cell.
Develop the next generation SiC power devices that can significantly reduce power loss and replace with traditional Si power devices.

(3) Accelerate restructuring of magnetic disk business

To rebuild the magnetic disk business, the group CEO will head the company and rapidly make strategic decisions. By ensuring agility to pursue business strategy and leveraging its advanced technologies and development capability, the company will strive to reinforce earning power while maintaining its competitive advantages. To facilitate the restructuring process, the company will also concentrate management resources on key customers and reorganize production lines.

2. Schedule

As of October 1, 2009,

(1) FAT will be dissolved through merger to FHC; and
(2) semiconductor and photoconductive business units of FDT will be transferred to FES.