October 10, 2019
Name of Company

KAGA ELECTRONICS CO., LTD.

Stock Code8154 Tokyo Stock Exchange, First Section

Head office

20-Kanda Matsunaga-cho, Chiyoda-ku, Tokyo,Japan
Ryoichi Kado, President and COO

Representative
Contact

Eiji Kawamura, Managing Director, Head ofAdministration Headquarters
Tel: +81-(0)3-5657-0111

Notice Regarding Termination of Agreement and Trading
between a Consolidated Subsidiary of the Company and its Major Supplier
Kaga Electronics Co., Ltd. (“the Company”) is informing you of the following matters regarding the distributionagreement executed between our consolidated subsidiary Fujitsu Electronics Inc. (hereinafter “Fujitsu Electronics”)
and its major supplier, the United States company Cypress Semiconductor Corporation (“Cypress”) (the“Agreement”) because the Company anticipates the termination of the Agreement and cessation of trading
thereunder as of October 10, 2019. The impact of the termination of the Agreement on the Kaga Group’s
consolidated business performance for the fiscal year ending March 2020 has already been factored into theCompany’s forecast for the current fiscal year announced on August 7 of this year.

1.

Background to the Cessation of Trading
Fujitsu Electronics is engaged in the distribution of a wide variety of semiconductor products as a
Cypress distributor. While Fujitsu Electronics has maintained good relations with Cypress since it beganselling Cypress Semiconductor products to its customers, Fujitsu Electronics has been notified by Cypress
that it intends to terminate the Agreement as of October 10, 2019.
Upon receiving this notification, the Company and Fujitsu Electronics have pursued talks with Cypress
in order to continue business transactions. However, the parties have been unable to come to anunderstanding. The Company and Fujitsu Electronics plan to further pursue such talks in the future.

2.

Overview of Fujitsu Electronics Inc.
Name

Fujitsu Electronics Inc.

Representative

President and Representative Director

Address of head office

Shin-Yokohama Chuo Building, 2-100-45, Shin-Yokohama, Kohoku-ku,Yokohama, Kanagawa Prefecture, Japan

Business

Design, development and sale of electronic devices‐1‐Junji Ogihara

3.

Overview of Cypress Semiconductor Corporation
Name

Cypress Semiconductor Corporation

Representative

Hassane El-Khoury, President and CEO

Address of head office

198 Champion Court San Jose, CA 95134, USABusiness

Design, development, manufacture and sale of semiconductor devices

Relationships with Kaga
Electronics Co., Ltd.

4.

None

Personnel relationships

None

Business relationships

No direct business relationship exists between
the Company and Cypress. However, Cypress
has a business relationship with theCompany’s consolidated subsidiary.

Related Party states

None

Details of Fujitsu Electronics’ business with Cypress Semiconductor
Name of transaction
counterparty
Type of transactions

Sales (actual) for fiscal year
ending March 2019

(Ref)
Impact on the Company’s
consolidated sales

5.

Capital relationships

Cypress Semiconductor Corporation
Stocking and sale of Cypress manufactured (semi-conductor)
productsFujitsu Electronics’ sales of Cypress
products (April 1, 2018 to March 31,
JPY50,766 million
2019)
Percentage of the Company’s consolidated
17.3%
sales (April 1, 2018 to March 31, 2019)
Sales by Fujitsu Electronics* of Cypress
products during the Company’s preceding
Q4 (January 1, 2019 to March 31, 2019)
JPY11,086 million*in the preceding Q4 after FujitsuElectronics became a Group company ofKaga Electronics(January 1, 2019)
Percentage of the Company’s consolidated
3.8%
sales (April 1, 2018 to March 31, 2019)

Impact on the Company’s Business Performance
The impact of the termination of the Agreement on the Kaga Electronics Group’s consolidated
business performance for the fiscal year ending March 2020 has already been factored into theCompany’s forecast for the current fiscal year announced on August 7 of this year.
End.

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