Oct. 3, 2002 – Tokyo, Japan – Hitachi, Ltd. and Mitsubishi Electric Corp. have reached a basic agreement to establish a new semiconductor company, Renesas Technology Corp., that will focus on system LSI operations.

The new company will be established on April 1, 2003, and will aim to be a reliable semiconductor manufacturer, working as an intelligent chip solution provider supporting system partners on a global basis.

This agreement is a result of discussions to integrate system LSI businesses, which was agreed to on March 18.

Hitachi and Mitsubishi Electric will take advantage of the special provisions for corporate reorganization under the Japanese Commercial Code to jointly establish a new company and will move both companies’ semiconductor operations to the new company, including microcomputer, logic, analog, and discrete devices and memory (flash memory, SRAM etc.) with the exception of DRAM.

The plans are to appoint Koichi Nagasawa (currently exec. VP, member of the board group president, semiconductor, Mitsubishi Electric) as chairman & CEO, and Satoru Ito (currently senior corporate officer, president and CEO of semiconductor and IC, Hitachi) as president and COO.

Upon establishment of the new company, the sales/service divisions and companies in Japan will be integrated. This will create a single, end-to-end operation of development, design, and manufacturing to sales and service, allowing system solutions to be provided based on the customer’s point of view.

Regarding those employees who will be transferred to the new company, the terms and conditions of their existing employment contracts will be honored in accordance with the applicable legal requirements.