Hitachi and Fuji Electric are also looking for other opportunities to expand collaboration in power semiconductors, including sharing of production facilities.

Power semiconductors are key components of the electric energy control systems used in various types of industrial equipment and consumer goods, such as power generation and transmission equipment, railway cars, machine tools, and inverters. All processes in the production of power semiconductors require a degree of environment cleanliness on a par with that in the production of microcomputers, LSIs and other microchips. But power semiconductors have another requirement not shared by microchips. They have to be fabricated to stand up under high voltage and current. Facility and development costs are therefore formidable.

The power semiconductor market is increasingly demanding products that have a broader range of applications and are more technically sophisticated in terms of intelligence, compactness and other features. The market is also marked by rising demand for customized products and intensifying price competition. These trends put strong pressure on the manufacturer to optimize R&D cost effectiveness, use human resources more efficiently, minimize costs, and beat competitors to the market with a product lineup matched to emerging customer requirements.

Hitachi and Fuji Electric believe the new company will provide a number of benefits. It will allow the two companies to exploit the synergy between their world-class technologies to strengthen market position. Also, by making it easier to boost cost effectiveness and accelerate the pace of R&D, it will permit them to offer products with enhanced cost-performance. Another expected advantage is an improvement in the profitability of the power semiconductor businesses of both companies owing to the sharing of R&D costs.

As one of the world's top producers of large-capacity, high-voltage IGBTs, Hitachi, Ltd. is particularly well known for IGBTs meeting the demanding reliability standards of railway cars. It is also a global leader in the manufacture of diodes for automotive applications, high-voltage one-chip inverters and similar products. Hitachi sets itself apart from other companies in this sector by also offering a line of high added-value power electronic products incorporating its power semiconductor devices.

The tie-up with Fuji Electric, an acknowledged force in the medium-capacity IGBT and high-voltage diode sectors, will strengthen Hitachi's ability to respond rapidly to market priorities and to upgrade the performance of its product systems.

Fuji Electric, a leading producer of power semiconductors, supplies advanced, high-performance, high-functionality power devices to a broad spectrum of domestic and overseas customers, including rolling stock manufacturers, manufacturers of factory automation and other industrial equipment, automakers, information and communication system manufacturers, and home appliance manufacturers. Fuji Electric is developing its power electronics business around the nucleus of its power semiconductor operations.

By collaborating with Hitachi, a company with well-established expertise in large-capacity, high-voltage semiconductors, Fuji Electric will be able to fill out its product lineup, speed up product development, and expand the scale of its business.

Hitachi and Fuji Electric plan to use their complementary strengths in the power semiconductor sector to speed up development of a diversity of products responding to customer requirements. Their goal is to secure top status among power semiconductor producers worldwide.

Abbreviations in text
-LSI	Large Scale Integrated Circuit
-IGBT	Insulated Gate Bipolar Transistor
-IC	Integrated Circuit
-UPS	Uninterruptable Power Supply

New company in profile
1. English name	Fuji-Hitachi Power Semiconductor Technologies Co., Ltd.
2. Location	Shinagawa-ku, Tokyo
3. Capital	Pending decision (Hitachi and Fuji Electric 50% each planned)
4. Establishment	Planned for November 1999
5. President	Pending decision
6. Employees	About 130
7. Main business	Power semiconductor development and design