Renesas Electronics Strengthens its Overseas Material Procurement Structure

Establishes Second Overseas Procurement Office in Shanghai, China, Adding to the Existing Department in Taiwan

TOKYO, Japan - Renesas Electronics Corporation (TSE: 6723), a premier supplier of advanced semiconductor solutions, today announced its plan to establish a new overseas procurement office within its sales subsidiary in China, Renesas Electronics (Shanghai) Co., Ltd., to promote globalization of the material procurement structure to address the company’s aim of expanding in our global business. The new structure will be Renesas Electronics’ second overseas procurement office adding to the one in Taiwan, and is scheduled to start operations on April 1, 2011.

Recently, many semiconductor companies, particularly the world’s major foundries and assembly subcontractors, are expanding both their own manufacturing facilities and their outsourcing businesses in China, and semiconductor materials suppliers in China and from outside China are increasing their manufacturing capacity. For this reason, China is expected to grow rapidly as a procurement market over the next several years.

To address these changes in the procurement environment, Renesas Electronics is establishing a material procurement base in China, to enable more robust material procurement support for overseas manufacturing subsidiaries in China planning to expand their production capacity and to allow cost reduction for all of the company’s manufacturing subsidiaries including the ones in Japan by expanding procurement of materials at lower prices.

In addition, by having the company’s offshore procurement bases place orders with Japanese manufacturers denominated in foreign currency, Renesas Electronics will be able to hedge against exchange risks while increasing sales overseas.

Renesas Electronics is targeting to increase its overseas sales in procurement in FY2012 by more than 1.5 times from FY2010, and by strengthening its procurement structure, the company plans to further expand its overseas procurement ratio from the current 18 percent in FY2010 to 30 percent in FY2012.

In addition, Renesas Electronics aims to boost its overseas sales ratio from the current 50 percent in FY2010 to 60 percent in FY2012. As part of this effort, the company has been establishing a structure within its Chinese sales subsidiary, Renesas Electronics (Shanghai) Co., Ltd., to enable rapid decision making in areas from marketing to design, sales, and manufacturing in order to focus on the Chinese market, which continues to experience strong growth both in manufacturing facilities for electronic devices for worldwide markets and as a center of consumption.

To shift its procurement target from Japanese to non-Japanese suppliers, Renesas Electronics will establish a material procurement base in Shanghai and aims to expand its procurement throughout Asia by working in concert with the purchasing base in Taiwan.
Overview of the newly established procurement department in Shanghai, China
Name of the department: International Procurement Office, Renesas Electronics (Shanghai) Co., Ltd.
Location: Units 204 and 205, AZIA Center, No. 1233 Lujiazui Ring Rd., Pudong District, Shanghai 200120, China
Date of establishment: April 1, 2011
Procurement items: Wafer subcontractors, assembly subcontractors, semiconductor materials, etc.
About Renesas Electronics Corporation

Renesas Electronics Corporation (TSE: 6723), the world’s number one supplier of microcontrollers, is a premier supplier of advanced semiconductor solutions including microcontrollers, SoC solutions and a broad range of analog and power devices. Business operations began as Renesas Electronics in April 2010 through the integration of NEC Electronics Corporation (TSE:6723) and Renesas Technology Corp., with operations spanning research, development, design and manufacturing for a wide range of applications. Headquartered in Japan, Renesas Electronics has subsidiaries in 20 countries worldwide. More information can be found at www.renesas.com.