Tokyo Electron Limited (TEL) and Tokyo Electron Device Limited (TED) announced today that they have concluded a memorandum concerning the spin-off of TEL's computer network business and its succession by TED. The transaction is scheduled to become effective October 1, 2006. Details are provided below.

The parties plan to conclude a contract for the corporate separation in late May 2006, and any matters as yet undetermined will be announced at that time.

1. Objectives of the Corporate Separation

The Tokyo Electron Group has entered the electronics industry and conducts business in four primary areas: semiconductor production equipment (SPE), flat panel display (FPD) production equipment, computer networks, and electronic components.

With respect to the SPE and FPD businesses, TEL and its subsidiaries (with the exception of TED) are engaged in business as manufacturers that carry out everything from research and development to manufacturing, marketing, sales and service.

Meanwhile, TEL's computer network business and TED's electronic component business have common customers, and both companies are engaged in trading business that handles cutting-edge products, particularly from overseas suppliers.

Therefore, by taking over TEL's computer network business, TED will be able to achieve synergistic effects for its trading business, expand its scale of business, and improve its business performance. Consequently, TEL will raise its management and operating efficiency and improve its consolidated business performance. For these reasons, the parties decided to implement this reorganization.

2. Overview of the Corporate Separation

(1) Schedule for the Corporate Separation
Separation contract approved by Board of Directors(both companies): Late May 2006 (scheduled)Separation contract concluded (both companies): Late May 2006 (scheduled)Separation contract approved by general meeting of shareholders (TED): June 21, 2006 (scheduled)In accordance with the provisions of Article 784, Paragraph 3 of the Companies Law (simple separation through absorption), TEL does not require the approval of the corporate separation contract by the general meeting of shareholders.

(2) Method of the Corporate Separation
Under simple separation through absorption, TEL is defined as the separating company and TED as the succeeding company.

(3) Allocation of Shares
The number of new shares (common stock) that TED shall grant to TEL in consideration for the succession of the computer network business will be announced when a definite decision is made.

3. Details of the Divisions to be Spun Off

All business divisions engaged in the computer network business with the exception of the Aero Component Business, Solution Sales Group.

4. Details of the Companies Involved

(Non-consolidated, as of March 31, 2006)

Trade Name	Tokyo Electron Limited (separating company)		Tokyo Electron Device Limited (succeeding company)
Main business activities	Research and development, purchase, sale and service of semiconductor production equipment and flat panel display production equipment and purchase, sale and service of computer networks products		Design, development, purchase and sale of semiconductor products, board products, software and general electronic components
Date of establishment (Date of incorporation)	November 11, 1963 (April 6, 1951)		September 1, 1990 (March 3, 1986)
Head office location	3-6 Akasaka 5-chome, Minato-ku, Tokyo		1, Higashikata-cho, Tsuzuki-ku, Yokohama City, Kanagawa
Representative	Kiyoshi Sato, President		Toshiaki Sunagawa, President
Capital	54,961 million yen		2,495 million yen
Shares issued	180,610,911 shares		92,000 shares
Shareholders' equity	285,357 million yen		15,183 million yen
Total assets	543,082 million yen		36,477 million yen
Closing date	March		March
Number of employees	1,006		554
Main customers	Domestic and overseas semiconductor and flat panel display manufacturers		Domestic and overseas electronics manufacturers
Main shareholders and ownership percentages	The Master Trust Bank of Japan, Ltd.: 8.46% The Chase Manhattan Bank N.A. London: 5.94% Tokyo Broadcasting System, Inc.: 5.66%		Tokyo Electron Limited: 69.56% Tokyo Electron Device Employee Shareholders Association: 2.86% The Master Trust Bank of Japan, Ltd.: 1.35%
Main banks	The Bank of Tokyo-Mitsubishi UFJ, Ltd., Sumitomo Mitsui Banking Corporation		The Bank of Tokyo-Mitsubishi UFJ, Ltd., Sumitomo Mitsui Banking Corporation
Relationship between the companies involved	Capital relationship		TEL owns 69.56% of TED's shares
	Personnel relationship		our TEL directors are also TED directors.One TEL auditor and one executive officer are TED auditors.
	Business relationship		Purchase and sale of electronic components

5. Financial Results for the Previous Three Fiscal Years

　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　(Non-consolidated; as of March 31, 2006)

	TEL (separating company)			TED (succeeding company)
Fiscal year	Year ended March 31, 2004	Year Ended March 31, 2005	Year Ended March 31, 2006	Year Ended March 31, 2004	Year Ended March 31, 2005	Year Ended March 31, 2006
Net sales (million yen)	433,708	536,711	572,019	85,738	88,079	87,456
Operating income (million yen)	193	28,118	37,861	3,182	3,106	3,088
Ordinary income (million yen)	8,294	33,227	44,836	2,952	2,820	2,637
Net income (million yen)	3,778	33,805	29,256	1,680	1,916	1,541
Net income per share (yen)	21.11	188.51	163.02	35,991.94	20,597.25	16,572.95
Dividends per share (yen)	10	45	55	13,300	5,500	6,000
Shareholders' equity per share (yen)	1,320.41	1,474.67	1,599.46	277,175.86	154,285.18	164,858.13

6. Projection of Net Sales by the Spun off Division this fiscal year ending March 31, 2006

Net sales in the spun off division (computer network business) are expected to be 8.5 billion yen in each half, for total net sales of 17.0 billion yen this fiscal year ending March 31, 2006. TEL and TED will announce any prospective impact on financial results for the current fiscal year when the corporate separation contract is concluded.