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Sachem and SDK Form TMAH Joint Venture

March 22, 2001

Sachem Inc. of the United States, the world's largest producer of tetramethylammonium hydroxide (TMAH), and Showa Denko K.K. (SDK) have agreed to cooperate in the TMAH business through a newly established joint venture.

TMAH is raw material for developer used in the production of semiconductors and thin film transistors for liquid crystal displays. World demand for TMAH is expected to grow to more than 40,000 tons by 2004, from approx. 30,000 tons in 2000. In particular, the TMAH market is expected to expand by around 50% during that period in Asia, centering on Japan, South Korea, Taiwan and China. As a result, it is estimated that majority of TMAH produced in the world will be consumed in Asia in 2004.

Through this alliance, Sachem secures a production site in Asia to expand its sales in the region and can utilize SDK's semiconductor-related service network in Asia. For SDK, the alliance means stronger cost position in the TMAH business, which the company intends to expand together with such semiconductor-related businesses as specialty gases, scrubbers and Solfine (an alternative to chlorinated solvents).

SACHEM Showa Co., Ltd. will continue to import part of the TMAH requirements from the U.S. to ensure stable supply of the product, while pursuing the possibility of a second-phase expansion at Higashinagahara. The JV, which aims to become the largest TMAH supplier in Asia, plans to generate sales of ¥1.5 billion in 2004.

The new joint venture SACHEM Showa Co., Ltd. has been established by changing the name of Sachem Japan, Ltd. after SDK's 34% equity participation. The joint venture is to manufacture TMAH and sell the product to customers in Asia. The two parent companies' TMAH marketing activities in Asia have been consolidated into the joint venture. SACHEM Showa Co., Ltd. has acquired SDK's TMAH plant at Higashinagahara, Fukushima Prefecture, and intends to expand the capacity to strengthen its cost competitiveness. The plant operation is entrusted to SDK.

The outlines of SACHEM Showa Co., Ltd. are as follows:
Head office: 6-27, Mizuhai 5-chome, Higashi Osaka
Plant: Higashinagahara (in SDK's premises)
Filling and diluting facilities: Higashi Osaka (at head office location)
Capital: ¥75 million (Owned 66% by Sachem, Inc. and 34% by SDK)
President: Mitsuya Okano (President, Sachem Japan, Ltd.)
Directors: Four from Sachem, Inc. and two from SDK


Profile of Sachem, Inc

Head office Austin, Texas, U.S.A.
Plant Cleburne, Texas, U.S.A.
Established 1950
President John E. Mooney
Scope of business Manufacture and sale of very high purity products such as TMAH, solvents and resins as well as OEM services