OKI Conclude Agreement on Transfer of Printed Circuit Board Business with Tanaka Kikinzoku

OKI Conclude Agreement on Transfer of Printed Circuit Board Business with Tanaka Kikinzoku

TOKYO, June 27 2012 -- OKI (TOKYO:6703) today announces an agreement with Tanaka Kikinzoku Kogyo K.K (Tanaka Kikinzoku hereinafter) on the transfer of Tanaka Kikinzoku's printed circuit board business to OKI. On June 18, the two companies concluded an agreement on the transfer of stock whereby the printed circuit board business will be transferred to a new company established by Tanaka Kikinzoku. Thereafter, effective October 1, OKI will acquire an 80% stake in the new company.

Formulated in fiscal 2010, OKI's mid-term business plan identifies high-end electronic manufacturing services (EMS) drawing on its advanced production technologies and quality control capabilities as a future growth area. Launched in 1965, OKI's printed circuit board business has won renown for its large, multilayer boards based on its prominent technologies, including the world's first 80-layer printed circuit board. To expand its EMS business, OKI faces the need both to expand its printed circuit board business and to further strengthen its integrated production system, ranging from printed circuit boards, OKI's strength, through assembly of final products.

Since launching its printed circuit board business in 1970, Tanaka Kikinzoku has earned the trust of numerous customers by achieving high quality and reliability in various areas, including large, multilayer boards supplied to the aerospace industry.

To improve its own competitive abilities as a company and in response to structural changes in the industry—including a contracting domestic printed circuit board market—Tanaka Kikinzoku had recently been repositioning its printed circuit board business while moving forward with business structural reforms. The company was in the midst of this process when it received the business transfer proposal from OKI. Identifying promise and high growth in OKI's EMS business and an opportunity to ensure the continuity of the transferred business and related employment, Tanaka Kikinzoku reached agreement with OKI based on a match between the goals of both companies.

Through this business transfer, by expanding integrated production from printed circuit boards through assembly of final products and by expanding domestic market share in the business of printed circuit boards for high-end products, OKI is seeking to achieve EMS business sales of 50 billion yen in fiscal 2015. Despite a contracting domestic printed circuit board market, demand remains strong for large, multilayer printed circuit boards for high-end products, driven by market trends such as rising investment in the high-speed, high-bandwidth data communications infrastructure. The size of this market is expected to reach 100 billion yen/year.

Overview of the new company resulting from this transfer of stock

Name

OKI Tanaka Circuits K.K. (planned)

Address

15-68 Takarada 1-chome, Tsuruoka, Yamagata Prefecture, Japan

President

TBD

Lines of business

Development, design, manufacture, and sale of high-density, multilayer printed circuit boards

Paid-in capital

350 million yen (planned)

Date established

September 2012 (planned)

Number of employees

330

About OKI Electric Industry (OKI)

Founded in 1881, OKI Electric Industry is Japan's leading telecommunications manufacturer. Headquartered in Tokyo, Japan, OKI provides top-quality products, technologies, and solutions to customers through its info-telecom systems and printer operations. Its various business divisions function synergistically to bring to market exciting new products and technologies that meet a wide range of customer needs in various sectors . Visit OKI's global website at http://www.oki.com/.

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