Hitachi, Ltd., Nippon Steel Corporation (NSC), and the Economic Development Board
of Singapore(EDB) today announced that they have reached an agreement that the joint
venture between the three parties, namely, Hitachi Nippon Steel Semiconductor
Singapore Pte. Ltd.(HNS), in which Hitachi and NSC have been involved as partners of
equal standing, will change to an arrangement in which management will be assumed
predominantly by Hitachi starting April 1999.
HNS was established jointly in June 1996 by Hitachi, NSC and EDB as a production
base for cutting-edge DRAMs designed by Hitachi, and has been in volume production
since the summer of 1998. However, faced with the growing need to accelerate plans
for introducing 256-megabit DRAMs and other new products to respond to sharp
fluctuations in the DRAM market, Hitachi has been exploring ways to change the
management arrangement so as to permit greater resilience in the operation of HNS. At
the same time, NSC, having withdrawn from semiconductor production within Japan,
has been indicating to EDB and Hitachi its intention to limit the status of its
involvement in HNS. Thus, in view of these circumstances, Hitachi, NSC and EDB
have agreed to amend their joint venture agreement.
The main points of the amendment to the joint venture agreement are as follows:
(1) HNS shares held by NSC (35%) shall be converted to non-voting-right shares as
of April 1, 1999.
(2) The number of the members of the board of directors of HNS shall remain at
five, of which four will be nominated by Hitachi and one by EDB. The directors
representing NSC on the board of HNS will retire as of March 31, 1999.
Hitachi will continue to view HNS as one of its major volume-production bases for
state-of-the-art DRAMs such as 64-megabit DRAMs and 256-megabit DRAMs.
Moreover, now that this change in the arrangement will facilitate more flexible business
management, Hitachi intends to move ahead with the early introduction of 256-megabit
DRAMs, and at the same time will study the future introduction of system LSIs and
other products. From the standpoint of nurturing and strengthening the semiconductor
industry in Singapore, EDB will continue to support the management of HNS as before.
While NSC's commitment to HNS is going to be limited, it remains supportive of HNS.
Outline of companies
About Hitachi Nippon Steel Semiconductor Singapore Pte. Ltd.
Managing Director: Katsuhiko Katayama
Location: Tampines, Singapore
Establishment: July 1996
Initial Investment: S$1.3 billion
Paid-up Capital: S$440 million
Equity Participation: Hitachi Group 35%
Nippon Steel Group 35%
EDB Group 30%
Products 64-megabit DRAMs
Production Capacity 20,000 8"wafers / month
About Hitachi
Hitachi, Ltd.(TSE:6501), headquartered in Tokyo, Japan, is one of the world's leading
global electronics companies, with fiscal 1997 (ended March 31, 1998) consolidated
sales of 8,417 billion yen ($63.8 billion*). The company manufactures and markets a
wide range of products, including computers, semiconductors, consumer products and
power and industrial equipment. For more information on Hitachi, Ltd., please visit
Hitachi's Web site at http://www.hitachi.co.jp.
* At an exchange rate of 132 yen to the U.S. dollar.
About Nippon Steel Corporation
Nippon Steel is the world's leading steelmaker, commissioning Japan's first modern
blast furnace in 1886. While its core business is steelmaking, it is also advancing in
other directions under a multiple-business management.
The company meets the diversified needs of industry and society with technologies that
are in the vanguard of the era. It extends technical cooperation to many steel companies
worldwide, and promotes local production through many joint venture projects. Today,
based on its wealth of expertize it is progressing in the fields of engineering and
construction, and into other industrial materials such as titanium, new materials and
chemicals, as well as electronics and information/communication systems. For more
information on Nippon Steel Corporation, Ltd., please visit Nippon Steel Corporation's
Web site at http://www.nsc.co.jp
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