Regarding Acquisition of Stock of Integrated Device Technology, Inc.

1. Purpose of the Acquisition

Renesas has been executing its growth strategy to thrive as a world-leading embedded solution provider in the rapidly changing global semiconductor market. As the pillars of its growth strategy, Renesas is accelerating its focus on the automotive segment, where Renesas has maintained a key global position over many years and further growth is anticipated in areas such as autonomous driving and EV/HEV; industrial and infrastructure segments, which are expected to advance with Industry 4.0 and 5G (fifth-generation) wireless communications, as well as the fast-growing IoT segment.

In order to achieve this growth strategy, Renesas is working to expand its analog solution lineup and to strengthen its kit solution offerings that combine its world-leading microcontrollers (MCUs), system-on-chips (SoCs) and analog products. In this context, Renesas already completed the acquisition of Intersil Corporation (“Intersil”), a U.S.-based analog semiconductor supplier, in February 2017.

With the Intersil acquisition, Renesas enhanced its lineup of power management-related analog devices as well as its ability to deliver kit solutions to customers combining Renesas’ MCUs/SoCs and analog products from the former Intersil. At the same time, Renesas expanded its sales and design-ins outside of Japan and strengthened global management capabilities by absorbing the former Intersil’s experienced management team into the Renesas Group.

Renesas has made the decision to acquire IDT, a U.S.-based analog semiconductor supplier, to contribute further towards the growth strategy. IDT is a global enterprise engaged in the development, production, sale, and provision of services related to analog semiconductor products such as mixed-signal semiconductor solutions particularly for markets related to the data economy such as data center and communication infrastructure that require big-data processing. IDT has annual sales of approximately US$843 million (approximately 92.7 billion yen at an exchange rate of 110 yen to the dollar, FY2018) and an operating profit margin of over 25 percent (non-GAAP basis).

The strategic benefits this transaction is expected to bring is as follows:

(1) Complementary products expand Renesas’ solution offerings:

The acquisition will provide Renesas with access to a vast array of robust analog mixed-signal capabilities in embedded systems, including RF, high performance timing, memory interface, real-time interconnect, optical interconnect, wireless power and smart sensors. The combination of these product lines with Renesas’ advanced MCUs and SoCs and power management ICs enables Renesas to offer an integrated solution that supports the increasing demand of high data processing performance. The enriched solution offerings will bring optimal systems from external sensors through analog front end to processors and interfaces.

(2) Expands business growth opportunities:

IDT’s analog mixed-signal products for data sensing, storage and interconnect are key devices that support the growth of data economy. Acquisition of these products enables Renesas to extend its reach to fast-growing data economy-related applications including data center and communication infrastructure, and strengthens its presence in the industrial and automotive segments.

Welcoming IDT as part of the Renesas Group after the Intersil acquisition completed in 2017 is therefore seen as an effective measure to further enhance Renesas’ competitiveness in fields where Renesas is focusing its efforts to strengthen the company’s position as a global leader.

2. Acquisition Method

The acquisition will be implemented as follows. For the purpose of the acquisition, Renesas will establish a wholly-owned subsidiary (“acquisition subsidiary”) in Delaware, United States that will then merge with IDT (in a reverse triangular merger). The surviving company following the merger will be IDT. Cash will be issued for IDT’s shares as consideration for the merger, and the shares of the acquisition subsidiary owned by Renesas will be converted into outstanding shares in the surviving company, making the surviving company a wholly-owned subsidiary of Renesas. The acquisition will take effect following approval by IDT shareholders and the relevant governmental authorities, and the fulfilment of the other customary closing conditions pertaining to merger agreements. Under the merger agreement concluded between the parties for the purpose of implementing the acquisition, Renesas guarantees the fulfillment of obligations by the acquisition subsidiary.

For the purpose of the acquisition IDT shares are to be acquired at a price of US$49.00 per share, for a total equity value of approximately US$6.7 billion (approximately ¥733.0 billion at an exchange rate of 110 yen to the dollar). Current cash reserves in addition to the proceeds from bank loan with major banks in the amount of approximately ¥679.0 billion are expected to be sufficient to cover the purchase price, therefore Renesas does not intend to raise equity finance including issuance of new shares for this transaction.