2021

Oct.1, 2021

Announcement of Acquisition of All Shares of SHIGA SEMICONDUCTOR Co., Ltd.

As we announced in "Announcement of Acquisition of 8-inch Analogue Semiconductor Fabrication Plant and MEMS business" dated June 30, 2021, MITSUMI ELECTRIC Co., Ltd. ("MITSUMI"), a subsidiary of MINEBEA MITSUMI Inc. (the "Company"), had entered into a share transfer agreement with OMRON Corporation ("OMRON"), in which agreement OMRON shall establish a new company which succeeds the semiconductor and MEMS^*1 fabrication plant and its MEMS product development function in OMRON's Yasu facility by way of company split and MITSUMI shall acquire all the shares of the new company. The Company is hereby pleased to announce that today, on October 1, 2021, MITSUMI has acquired from OMRON all the shares of the new company ("the Acquisition of Shares"), SHIGA SEMICONDUCTOR Co., Ltd. ("the Subject Company"), made it into a subsidiary and changed its name from SHIGA SEMICONDUCTOR Co., Ltd. to MMI SEMICONDUCTOR Co., Ltd., as described below.

*1 Micro Electro Mechanical Systems

1. Purpose of the Acquisition of Shares and the Company's Future Operating Policy

The Company's basic strategy is to identify the products as its core business called the "Eight Spears" in which the Company can demonstrate its strength, such as ultra-precision processing technologies and mass production technologies, and which would not be easily eliminated from the market and to provide the customers with new values by combining and integrating such products. Because analog semiconductors, one of the "Eight Spears", are important components as a gateway to IoT technologies, which is a business area that the Company is focusing on, the Company intends to further expand its analog semiconductor business by enhancing its product portfolio and entering new application markets. Also, as the Company advocates a new strategy of QCDESS (Quality, Cost, Delivery, Eco / Efficiency, Service, Speed) to differentiate itself in eco-efficiency, energy saving design for analogue semi-conductors plays a crucial role in significantly reducing electricity consumption.

The Company's semiconductor product supply includes power management ICs, timer ICs, MEMS sensors, magnetic sensors, automotive memories, and IGBTs^*2 for consumer products, automotive applications, medical devices etc. The Company is especially proud of its approximately 80% global market share^*3 of lithium ion battery protection ICs (one cell) used in smartphones and other products. Currently, in addition to realizing the synergies between MITSUMI and ABLIC Inc. ("ABLIC") which was integrated in April 2020, through enhancement of the R & D function and expansion of the production scale mainly in pre-process, the Company aims to further expand the business size and increase the business value, achieving growth in sales from the current 60 billion yen level to 100 billion yen within several years and even toward 200 billion yen within ten years with help of M & A.

Though the semiconductor / MEMS plant of the Subject Company currently mainly manufactures MEMS products, it has the 8 inch semiconductor pre-process capable of manufacturing analogue ICs, which will contribute to the Company's target of production capacity enhancement in terms of process, proprietary technologies, size, operators' skills etc. With the Acquisition of Shares, the Company has obtained the 8 inch production base, which is necessary to strengthen the competitiveness of the Company's semiconductor business in the future, and secured the realization of the analogue semiconductor business's growth target even more.

After the Acquisition of Shares, the Company will build a production system for approximately 20 thousand 8-inch wafers per month at the plant by investing more than 10 billion yen, (which investment has been selected for a supply chain subsidy program^*4 for 4.03 billion yen), as a first step for capacity increase. Thereafter, as there is further room for expansion at the plant, we intend to increase its capacity in accordance with demand etc. In this manner, we will build up a new core plant for MinebeaMitsumi Group's pre-process, contribute to the strengthening of the domestic supply chain for analogue semiconductors as well, and aim to achieve approximately 25 billion yen sales in the fiscal year ending March 2026.

In addition, the Subject Company has a wide range of design technologies and peripheral technologies for MEMS products. By combining these technologies and the Company's MEMS sensor product technologies, we can expect such synergies as stronger lineup through new product development, higher performance of existing products, additional functions etc. In particular, as both the Subject Company and the Company have strength in the field of MEMS pressure sensors for blood pressure monitors, we will strengthen its competitiveness as a new niche top product. Furthermore, the acquisition of the MEMS sensor business will lead to the strengthening of the Sensor business, which is one of the Eight Spears strategy, and we will allocate more resources to MEMS products other than blood pressures monitors as well in the future.

*2 Insulated Gate Bipolar Transistor, a type of power semiconductor device

*3 According to the Company's research

*4 Program for Promoting Investment in Japan to Strengthen Supply Chains

2. Outline of the company having become a subsidiary

3. Outline of the counterparty on the share acquisition

4. Outline of the company having acquired the shares

5. Outline of the parent company of the company having acquired the shares

6. Impact on business performance

Impact of this transaction on the Company's consolidated business performance for the fiscal year ending March 31, 2022 is expected to be minimal.

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