English Top>News Releases>2004>SDK Signs MOU with Trace to Strengthen Hard Disk Business

News Releases

SDK Signs MOU with Trace to Strengthen Hard Disk Business

February 17, 2004

Showa Denko K.K. (SDK) has signed a memorandum of understanding with Trace Storage Technology Corp. of Taiwan, R. O. C. (Trace) to study the possibility of SDK’s investment in Trace. SDK has provided its hard disk media production technology to Trace based on the agreement concluded in May last year.
Under the MOU, Trace is considering issuing new shares for allocation to third parties and SDK is considering subscribing to those shares, thereby making Trace a joint venture. The investment scheme will be finalized after due diligence of Trace. The transaction will be subject to the approval by the Taiwanese Government. Details of the transaction will be announced after final agreement is reached.

Trace - a member of the Koos Group established in 1990 and capitalized at US$52 million - is an integrated hard disk manufacturer led by CEO Mr. Chao-Chin Tung. Trace has the capacity to produce 2 million hard disks a month, and owns aluminum-substrate-producing facilities as well. After adopting SDK technology, Trace has obtained customer approval for its 80-gigabyte hard disks. Trace has maintained high capacity utilization since September last year.

SDK has been strengthening its hard disk media business since last year by establishing Showa Denko HD Singapore Pte. Ltd. (SHDS) in January and expanding SHDS capacity by one million disks a month in October. The technological alliance with Trace since last May has also strengthened the business.

SDK now has the capability to supply 8.3 million hard disks a month, the largest in the world as an independent vendor. Furthermore, SDK is the only independent vendor in the world that can provide both glass- and aluminum-substrate hard disks in commercial quantities. SDK is planning to expand capacity at Trace after completion of the investment and increase its total supply capability to more than 10 million hard disks a month.