TOKYO, Japan - OMRON Corporation (TSE: 6645, US: OMRNY)announced today that it has reached a preliminary agreement with NHK Spring Co., Ltd. to acquire NHK Spring’s FTTH (note 1) optical coupler business.

NHK Spring's optical coupler business includes the component micro-fabrication technologies and film deposition technologies required to produce high-performance quartz optical waveguides (note 2), as well as the development, manufacture, and sale of optical coupler modules (note 3) that incorporate these optical waveguides. NHK Spring is a top supplier of optical couplers in North America, with total sales of 1.3 billion yen in fiscal 2005. OMRON, as the first company in the world to commercialize an optical coupler module incorporating proprietary stacked polymer optical waveguide technology (note 4), expects to enjoy substantial synergies through this acquisition.

The FTTH market is expanding rapidly in Japan and the United States, and in future this growth is expected to extend into Europe and Asia. OMRON intends to combine NHK Spring's quartz optical waveguide technology with its own stacked polymer optical waveguide technology to create new high-performance, cost-competitive products that will reinforce its product lineup and expand its business in the FTTH optical coupler market. This agreement is also expected to help stimulate sales of OMRON's optical switches and CWDM Mux/Demux Modules.

As a result of this acquisition and the synergies it is expected to generate, OMRON forecasts that its optical communications component business will achieve total sales in fiscal 2006 of approximately 2 billion yen

NHK Spring and OMRON are now working to finalize the details of this agreement, which is scheduled to take effect on November 1, 2006.

Note 1:

FTTH stands for "Fiber To The Home" and refers to optical fiber-based data communications systems aimed at the consumer market.

Note 2:

An optical waveguide is an element that branches optical power.

Note 3:

An optical coupler is a branching device for optical power. An optical coupler is made by connecting optical fibers to both ends of an optical waveguide. Optical couplers are available with 4, 8, 16, and 32 branches.

Note 4:

OMRON calls this technology “Stacked Polymer Optical IC/Advanced Technology” (SPICA).