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Capacitor-grade Tantalum Powder Production Capacity Expanded

January 25, 2001

Showa Cabot Supermetals K.K. (SCSM), a joint venture between Showa Denko K.K. and Cabot Corporation of the United States, is expanding its production capacity for capacitor-grade tantalum powder to meet brisk demand for the product for use in cellular phones and mobile terminals (personal digital assistant:PDA).

The expansion work at SCSM's Higashinagahara Plant in Fukushima Prefecture began in 1999.
A new powder adjustment plant was completed in October 2000. The expansion will be completed in April 2001 with start-up of a new plant for the reduction process that precedes the powder adjustment process. Together with the expansion of R & D facilities for the development of high-performance grades with still higher capacitance value (CV), the investment will total approx. 5 billion Yen .

Background

Tantalum powder manufacturers have been operating their plants at full capacity due to the rapid growth of demand for tantalum capacitors used in electronic devices. Demand for capacitor-grade tantalum powder in the world grew at an annual rate of 25%-35% in the past two years.
Tantalum ore prices showed unusual increases in and after spring 2000 due to apparent supply shortage.

Although there may be an adjustment phase in the first half of 2001, a double-digit growth in tantalum powder demand is expected to continue in the years to come. In particular, demand for high-CV powder, where SCSM is the market leader and technically strong, will continue to show rapid growth.
In addition to 40,000-50,000 CV grades, SCSM last year started volume production and sale of 70,000-80,000 CV grades.
Furthermore, SCSM has started trial manufacture of the next-generation grades in the range of as high as 100,000-120,000 in CV.

Expansion of production capacity

Capacity expansion covers the whole process ranges. With the start-ups of the reduction process facility (scheduled for April 2001) and the powder adjustment process facility (already completed in October 2000), SCSM's tantalum powder production capacity will increase from 18 tons a month to 30 tons a month.
This will enable SCSM to achieve the goal of its five-year business plan (annual sales of 30 billion Yen in 2004) well in advance.

Expansion of R&D facilities

To maintain its leading position in the high-CV grade market, SCSM is aiming to develop and mass-produce tantalum powders in the 150,000-200,000 CV range. Increased CV of powder will ensure the production of higher-performance capacitors and conservation of raw materials.
SCSM will therefore put a lot of resources into this development, including assignment of more researchers.

Procurement of raw materials

To ensure a stable supply of raw materials, Cabot Corporation, one of the parent companies of SCSM, has been working with Gwalia of Australia to double the production of tantalum ores by 2003.

SCSM is also working hard to establish its own channels of purchasing tantalum ores from various ore-producing areas in the world. In Southern African region in particular, SCSM is developing new tantalum mines in cooperation with local mining companies to secure a long-term reliable supply of tantalum ores.

[Reference]

Outline of Showa Cabot Supermetals K.K.

Head office 9-5, Shiba-koen 2-chome, Minato-ku, Tokyo
President Minoru Yamanaka
Established March, 1972
Capital 434 million Yen
Shareholders
Showa Denko K.K. 50%
Cabot International Capital Corp. 50%
Scope of business Production and sale of tantalum products
Annual sales 1998: 13.1 billion Yen
1999: 16.6 billion Yen
2000: 21.0 billion Yen