News Releases

-- Aims to Integrate Design, Manufacturing and Sales to Provide Faster Response to Diversifying Customer Needs and Strengthen the Business –

Tokyo, June 11, 2013 --- Hitachi, Ltd. (TSE: 6501 / “Hitachi”) today announced that it has decided to create an integrated framework encompassing design, manufacturing and sales by transferring its power semiconductor business to subsidiary Hitachi Haramachi Electronics Co., Ltd. on October 1, 2013. The purpose of this reorganization is to provide faster response to diversifying customer needs in the power semiconductor business. In specific terms, Hitachi will transfer its design, manufacturing, quality assurance, sales and other operations of the power semiconductor business to Hitachi Haramachi Electronics Co., Ltd. (“Hitachi Haramachi Electronics”) via a company split. At the same time, Hitachi Haramachi Electronics will be renamed Hitachi Power Semiconductor Devices Co., Ltd. (Tentative). Certain disclosures and details have been omitted as the company split involves the transfer of a Hitachi business to a wholly owned subsidiary.

1. Purpose of the Organizational Restructuring

The power semiconductor market has been affected by China’s economic slowdown, the European economic crisis and other major changes. At the same time, however, measures in various spheres to create a low-carbon society are expected to continue apace on a global level. For this reason, Hitachi believes that the power semiconductor market should see even much more expansion going forward as this is a business that contributes to energy conservation.

The company split announced today will integrate power semiconductor operations from design and manufacturing to sales carried out in the Hitachi Group. These products are key devices in the Social Innovation Business, which includes rolling stocks, construction machinery, power generation and transmission & distribution equipments, automobiles and home appliances. This integration aims to expedite the flow of information and decision-making to strengthen the competitiveness of Hitachi’s component products.

Looking ahead, the new company will work to mass produce high-voltage-resistant IGBTs, which achieve the world’s best performance in terms of low power loss. These IGBTs are used in railway systems, construction machinery, wind power systems, power transmission and distribution systems, and other areas. In tandem, Hitachi Power Semiconductor Devices will step up the pace of development for commercializing SiC (silicon carbide) devices for which expectations are high as a next-generation element. In addition, it will respond to increasing demand for energy-efficient air conditioners in emerging nations with inverter ICs, leveraging its extensive track record in this market in Japan. Furthermore, in the automotive field, the new company will actively promote business with diodes for third-generation (resin-based) alternators that last longer and are more reliable.

In terms of sales, Hitachi Power Semiconductor Devices will progressively expand overseas sales bases to target the growing global power semiconductor market. At the same time, it will strengthen front sales and front sales engineering to respond to customer demand in light of the growth and evolution of market needs.

2. Outline of the Company Split

(1) Company Split Schedule

* For Hitachi, the company split is deemed to be a simple absorption-type company split pursuant to Article 784, Paragraph 3 of the Companies Act of Japan. And for Hitachi Haramachi Electronics, the company split is deemed to be a short-form absorption-type company split pursuant to Article 796, Paragraph 1 of the Companies Act of Japan. Therefore, Hitachi and Hitachi Haramachi Electronics do not plan to convene shareholders’ meetings to obtain approval for the company split agreement.

(2) Company Split Method

This is an absorption-type split in which Hitachi is the transferring company and Hitachi Haramachi Electronics is the successor company.

(3) Others

Hitachi has not issued any stock acquisition rights or bonds with stock acquisition rights.

Other details on the company split will be announced when they are determined.

3. Profile of the Parties of the Company Split

*1 Since Hitachi has been adopting U.S. accounting standards, this figure represents stockholders’ equity per shares

*2 Since Hitachi has been adopting U.S. accounting standards, this figure represents income before income taxes.

*3 Since Hitachi has been adopting U.S. accounting standards, these figures represent net income attributable to Hitachi, Ltd. stockholders and net income attributable to Hitachi, Ltd. stockholders per share basic, respectively.

4. Overview of the Business to Be Transferred

(1) Business of the Business to Be Transferred

Design, Manufacturing, Quality assurance and Sales, etc. of Power Semiconductor Business

(2) Others

Other details concerning the business to be transferred will be announced as they are decided.

5. Status of Succeeding Company after Transfers

6. Status of Hitachi After the Company Split

There will be no change in the company name, head office location, representative’s position or name, business activities, capital or fiscal year of Hitachi due to the company split.

7. Outlook

The company split will have no impact on the consolidated operating results of Hitachi.

(Reference) Consolidated Business Forecasts for the Year Ending March 31, 2014 (announced on May 10, 2013) and Consolidated Operating Results for the previous Fiscal Year

(Millions of yen)