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SDK to Consolidate Electronics Materials and Rare Earth Divisions

June 12, 2003

Showa Denko K.K. (SDK) will consolidate its Electronics Materials and Rare Earth divisions at Chichibu effective June 16, 2003, in an effort to strengthen the Company’s electronics business.

SDK’s Rare Earth Division is building a rare earth magnet alloy plant in Baotou, Inner Mongolia, China. In order to step up product/technology development and strengthen overseas presence, SDK has decided to consolidate the two divisions and pursue synergies.

The newly consolidated division, to be called the Electronics Materials Division, will have a Development Department and a Quality Assurance Department. The Development Department will facilitate R&D in electronics materials and rare earth magnet alloys to ensure smooth commercialization of new products. The Quality Assurance Department will strengthen quality assurance activities to better serve the customers.

Following the consolidation of the two divisions, the Chichibu Regional Office will come under the control of the new Electronics Materials Division. The regional office will strengthen facility maintenance and TPM (Autonomous Maintenance) activities to enhance production efficiency at Chichibu.

Under the ongoing medium-term consolidated business plan (the Sprout Project), SDK is assigning a substantial portion of its resources to the electronics business, aiming to provide the customers with products based on proprietary, leading-edge technologies.

Excerpt of organization chart