OMRON Announces Dissolution of Large-size Backlight Businesses and Closure of Production Sites

FOR IMMEDIATE RELEASEMarch 10, 2009

KYOTO, Japan - OMRON Corporation (TOKYO: 6645; ADR: OMRNY) will dissolve its large-size LCD backlight business and close two production sites, OMRON AUTOMOTIVE ELECTRONICS UK and the company's Minakuchi factory, as part of the emergency cost-cutting and structural reform efforts announced on January 30, 2009.

OMRON established the "Emergency Measures and Structural Reform HQ," a top-level division headed by President & CEO Hisao Sakuta, in January in response to the rapid worsening of the business environment. This division is responsible for implementing emergency measures to generate profit, including cost cutting and the consolidation of unprofitable businesses, as well as structural reform aimed at strengthening OMRON's revenue base in the medium term through the reorganization of core businesses and closure/consolidation of sites, among other measures.

The dissolution of the large-size backlight business and the closure of two production sites announced today reflect OMRON's commitment to implementing these measures. The company plans to carry out further structural reform during the "Revival Stage" (February 2009 - March 2011) and pledges to announce new developments promptly.

Dissolution of Large-size Backlight Business

OMRON will pull out of the large-size backlight business, which encompasses the development, manufacture and sales of large-size LCD backlights, dissolving subsidiary TAMA FINE OPT. and its subsidiaries TAMA FINE OPTO INC. and TAMA Fine Opto (Changshu) Co., Ltd.

  1. Reason for Dissolution
    Sales of large-sized LCD televisions have been stagnant due to a decrease in consumer spending, tipped off by the deterioration of the world economy as a result of the financial crisis. At the same time, price cuts led to intensified price competition, resulting in the rapid worsening of performance in the large-size backlight business. As the company does not anticipate large-scale improvement in profitability, OMRON determined that it would be difficult to continue to pursue this business.
  2. Overview of companies to be dissolved
    TAMA FINE OPT.
    Established: June 1, 2004
    Business lines: Development, manufacturing and sales of large-size LCD backlights
    Representative: Shuji Kotaki, President & CEO
    Location: 5-1-1 Futago, Takatsu-ku, Kawasaki-shi, Kanagawa 213-0002 Japan

    TAMA FINE OPTO INC.
    Established: October 14, 2004 (start of operations: December 1, 2004)
    Business lines: Development, manufacturing and sales of large-size LCD backlights
    Representative: Shuji Kotaki, Chairman
    Tomoaki Matsuda, President
    Location: 10F, No. 571 Ching Ping Road, Anping, Tainan, Taiwan (R.O.C.)

    TAMA Fine Opto (Changshu) Co., Ltd.
    Established: September 28, 2006 (start of operations: December 15, 2006)
    Business lines: Manufacturing of large-size LCD backlights
    Representative: Shuji Kotaki, Chairman
    Hideo Nakai, President
    Location: 10 Haicheng Industrial Square, Changshu Economic Zone, Changshu, Jiangsu, China

  3. Future plans

    Dissolution and liquidation of TAMA Fine Opto (Changshu) Co., Ltd. will begin promptly. TAMA FINE OPT. (in Japan) and TAMA FINE OPTO INC. (in Taiwan) will be dissolved by the end of September 2009, with liquidation set to begin shortly thereafter.

Closure of Production Sites

As part of its structural reform efforts, OMRON has decided to close two of its 49 production facilities, OMRON AUTOMOTIVE ELECTRONICS UK LTD (in England) and the Minakuchi factory (in Japan).

  1. OMRON AUTOMOTIVE ELECTRONICS UK LTD
    1) Reason for closure
    OMRON AUTOMOTIVE ELECTRONICS UK (OUK), which is engaged in the manufacture of automotive electronic components, was established as a subsidiary of OMRON in December 1987. In recent years the company's performance has been poor amid worsening business conditions brought on by the rapid downturn in the automotive market. OMRON does not anticipate recovery in the foreseeable future and for this reason decided to review its production bases in Europe, coming to the decision to close OUK by the end of fiscal 2010.
    2) Overview of OUK
    Location: Vantage Point, The Pensnett Estate, Kingswinford, West Midlands, DY6 7FP United Kingdom
    Business lines: Production of switches, controllers and other automotive electronic components

  2. Minakuchi factory
    1) Reason for closure
    OMRON's Minakuchi factory was established in 1975 as a specialty semiconductor factory, handling semiconductor design and development as well as production. OMRON is moving to expand IC and MEMS production, but space is limited at the Minakuchi factory, so the company has decided to move the Minakuchi factory's production functions, including MEMS, to its Yasu office in Yasu, Shiga prefecture, which is already producing MEMS and CMOS.
    2) Overview of Minakuchi Factory
    Location: 568 Matsuo, Minakuchi-cho, Koga-shi, Shiga 528-0074 Japan
    Business lines: Development and manufacture of IC, MEMS, optical devices

About OMRON

Headquartered in Kyoto, Japan, OMRON Corporation is a global leader in the field of automation. Established in 1933 and headed by President & CEO Hisao Sakuta, OMRON has over 35,000 employees in 38 countries working to provide products and services to customers in a variety of fields, including industrial automation, electronic components, social systems (ticket gate machines, ticket vending machines, and traffic control), and healthcare. For more information, visit OMRON's website at www.omron.com.

Contact
Sarah Hall (sarah_hall@omron.co.jp)
OMRON Corporate Communications Dept.
Tel.: +81-3-3436-7202

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