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News Release

February 5, 2010 Fuji Electric Holdings Co., Ltd.

Merger of Fuji Electric Group Power Semiconductor Manufacturing Subsidiaries

Fuji Electric Holdings Co., Ltd. (President: Haruo Ito; Headquarters: Shinagawa-ku, Tokyo) announced today that Fuji Electric Systems Co., Ltd. (President: Mitsunori Shirakura; Headquarters: Shinagawa-ku, Tokyo), a company positioned under its core business umbrella, has decided to establish a new company to manufacture power semiconductors as part of corporate restructuring by merging the following three consolidated subsidiaries effective April 1, 2010: Omachi Fuji Co., Ltd. (President: Akira Nagata; Headquarters: Omachi-shi, Nagano Prefecture), Hokuriku Fuji Co., Ltd. (President: Koji Abe; Headquarters: Namerikawa-shi, Toyama Prefecture), and Iiyama Fuji Co., Ltd. (President: Kazuo Fujioka; Headquarters: Iiyama-shi, Nagano Prefecture).

1. Overview of the merger

The Fuji Electric Group considers power supplies and industrial plant engineering as basic segments for its power semiconductor business. At the same time, it is focusing on the automotive field, including hybrid and electric vehicles as well as car electronics, and the new-energy field as priority areas, as the global market is expected to expand in these areas. Accordingly, the Group is working to reform its business portfolio and restructure its global manufacturing system for optimal production.

In this context, the Fuji Electric Group has been reorganizing its post-process production hubs since last year, accelerating its shift to overseas production bases in the Philippines and Malaysia to manufacture semiconductors for the power supplies and industrial plant engineering segments, as a means to reduce costs and manage foreign exchange risks.

This merger of three manufacturing subsidiaries in Japan is intended to speed up management decision-making and create a production system capable of manufacturing a wide-range of high-quality products in limited quantities to promptly meet customers' expectations.

Objectives of the merger:
(1) Share each production base's unique manufacturing technologies and skills, and further raise product quality
(2) Make employees more versatile across production bases and equipment, and create a production system capable of immediately responding to fluctuations in demand
(3) Quickly establish leading-edge manufacturing technologies at production hubs to mass produce next-generation devices such as Silicon Carbide (SiC) power semiconductors

2. Summary of the merger
(1) Planned effective date of merger
  April 1, 2010 (Thursday)
(2) Method of merger
  Through this merger, Omachi Fuji Co., Ltd. will be absorbed while Hokuriku Fuji Co., Ltd. and Iiyama Fuji Co., Ltd. will be dissolved.

3. Overview of companies to be merged
Name
Omachi Fuji Co., Ltd.
(surviving company)
Hokuriku Fuji Co., Ltd.
(to be dissolved)
Iiyama Fuji Co., Ltd.
(to be dissolved)
Main business
Manufacture of
semiconductor devices
Manufacture of
semiconductor devices
Manufacture of
semiconductor devices
Date of
establishment
June 1970
September 1969
November 1973
Location of
head office
Omachi-shi, Nagano
Prefecture
Namerikawa-shi,
Toyama Prefecture
Iiyama-shi,
Nagano Prefecture
Title and name
of representative
President and
Representative Director
Akira Nagata
President and
Representative Director
Koji Abe
President and
Representative Director
Kazuo Fujioka
Capital
300 million yen
98 million yen
40 million yen
Sales
Approx. 16 billion yen
Approx. 9 billion yen
Approx. 5 billion yen
Number of
employees
Approx. 240
Approx. 300
Approx. 180

4. Overview of the new company
Name
Undetermined *
Main business
Manufacture of semiconductor devices
Location of head office
Matsumoto-shi, Nagano Prefecture
Title and name of representative
Undetermined
Capital
300 million yen
Projected sales
Approx. 30 billion yen
* The new company name will be promptly announced when it is determined.

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