Fujitsu and Toshiba Update Status on
Collaboration in System-on-Chip Business

Tokyo, October 21, 2002 -- Fujitsu Limited and Toshiba Corporation today issued an update on their negotiations to build a complementary partnership in the semiconductor business focusing on system-on-chip (SoC). The companies first announced their intention to explore collaboration in this area in June.

Fujitsu and Toshiba have defined, and are vigorously exploring, three areas where collaboration is most practical: 1) unification and joint development of design infrastructure for 90-nanometer (nm) and 65-nm generation products; 2) joint development of advanced process technologies for 90-nm and 65-nm generation products; and 3) SoC solutions. With respect to shared design infrastructure, the two companies have already started to collaborate, working on unifying their IP macros and joint development. They are pursuing intensive, detailed discussions to implement joint development of process technologies and cooperation in the SoC solutions business.

To succeed in the SoC market, both companies consider it essential to be able to respond quickly and precisely to customer needs. Unlike collaboration in the commodity memory chip market, where economy of scale is most effective, both companies recognize that unifying their design platforms, process technologies, and strategic IP cores is vital to the SoC business, and so they are focusing their collaboration on the three areas mentioned above. Regarding the possibility of consolidating their SoC operations, the companies will examine such a scenario after assessing the fruit of these individual collaborative endeavors and taking a variety of considerations into account.

Progress in each of the three focus areas is discussed in greater detail below.

1. Design Infrastructure
To keep costs down while pursuing leadership in the advanced SoC market, the two companies will jointly develop and share a common design and development platform based on process technology of 90 nm and beyond. As a vitally important pillar of SoC development work, the design platform will require considerable resources and know-how to construct. By joining forces, the two companies can accelerate the construction of a design platform for 90-nm and more advanced process technology, enabling faster development of SoC solutions.

The two companies are moving forward with cooperation in the following four areas.

1) Common IP cores and joint development
Targeting applications for digital home networks and mobile networks, the two companies will first work on joint development of urgently needed IP cores.

Development work has begun, and will be completed next fiscal year, on the digital IP core for USB, PCI, serial interface, image/video-related applications, encryption-related technologies, as well as on the analog IP core for D/A converters, A/D converters, and PLLs. Following that, there will be joint development of critical IP as needed.

2) Developing a sophisticated common design environment
Work will begin this fiscal year on a common design environment that will allow customers and manufacturers to cooperate in order to develop products more quickly. Cooperation with EDA (Electric Design Automation) vendors will also be included.

3) Development of new technologies for digital consumer products and mobile handsets
Planning is currently underway for the joint development of new technologies, including low power consumption, signal integrity, and noise reduction, which would be critical for the 90-nm product generation and beyond. Actual development work will begin next fiscal year.

4) Preparing application software and middleware
The two companies are examining potential cooperation at the level of specific SOC products.

2. Advanced Process Technology
The two companies are pursuing joint development and common specifications for 90-nm process technology that is expected to be commercialized in 2003 and for which competition is intensifying. In CMOS process technology of 90 nm and beyond, the companies will participate in the standardization efforts of ASPLA (Advanced SOC Platform Corporation) in order to generate synergies with their own collaboration. Initially, Fujitsu and Toshiba are focusing their cooperation on common design rules and device parameters. Since further cost reductions through consolidation of development bases and joint development would entail coordination in facilities planning for test and volume production lines, the companies will continue to study this matter further.

3. Developing SoC Solutions
The two companies are currently examining areas where cooperation in developing SoC solutions would offer mutual benefits, and they have identified digital consumer products, such as digital televisions, personal video recorders, and silicon audio, as one potential candidate. The companies are continuing to look at specific ways to collaborate in SoC solutions in order to respond in a timely manner to market needs while giving priority to customer satisfaction.

Through these cooperative activities and discussions, Fujitsu and Toshiba are working to create a mutually beneficial business model, and to bring to market competitive SoC solutions more quickly. More information will be forthcoming on specific collaborative activities as they get underway.

About Fujitsu
Fujitsu is a leading provider of customer-focused IT and communications solutions for the global marketplace. Pace-setting technologies, high-reliability/performance computing and telecommunications platforms, and a worldwide corps of systems and services experts make Fujitsu uniquely positioned to unleash the infinite possibilities of the broadband Internet to help its customers succeed. Headquartered in Tokyo, Fujitsu Limited (TSE:6702) reported consolidated revenues of 5 trillion yen (about US$38 billion) for the fiscal year ended March 31, 2002. For more information, please see: http://www.fujitsu.com/

About Toshiba
Toshiba Corporation is a leader in information and communications systems, electronic components, consumer products, and power systems. The company's integration of these wide-ranging capabilities assures its position as a leading company in semiconductors, displays and other electronic devices. Toshiba has 176,000 employees worldwide and annual sales of over US$40 billion. Visit Toshiba's website athttp://www.toshiba.co.jp/index.htm.

[Press Contacts] Yuri Momomoto, Robert Pomeroy Fujitsu Limited, Public & Investor Relations Tel: +81-3-3215-5259 (Tokyo) Fax: +81-3-3216-9365 Press Inquiries

Makoto Yasuda Toshiba Corporation Corporate Communications Office Tel: +81-3-3457-2105 (Tokyo) e-mail: press@toshiba.co.jp

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