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SDK to Start Producing High-Purity Ammonia in Taiwan

October 14, 2004

Showa Denko K.K. (SDK) has decided to start producing high-purity ammonia in Taiwan as from May 2005 through a new subsidiary that will build a 1,000-ton-a-year plant at Tainan.

High-purity ammonia is increasingly used in the production of gallium-nitride light-emitting diodes (LEDs) and laser/electronic devices, and of semiconductors and liquid crystal displays (LCDs). (Ammonia serves as a nitrogen source in the former application and as a nitride-film-forming gas in the latter).

World demand for high-purity ammonia is expected to increase from around 3,000 tons in 2004 to 6,000 tons by 2008, due to sharp increases in demand in Japan, Taiwan and South Korea. Specifically, demand for use in LCD production is forecast to increase at an annual rate of 20-25%, centering on Taiwan and South Korea, while demand for use in LED production will grow at 10% or more, mainly in Japan and Taiwan.

SDK is already producing approximately 1,000 tons a year of high-purity ammonia in Kawasaki, Japan. The majority of the output is being exported to Taiwan, where SDK has a market share of about 50%.

To meet further growth in demand for high-purity ammonia in Taiwan centering on LCD applications, SDK will establish this month a new subsidiary named Taiwan Showa Chemicals Manufacturing Co., Ltd. The new company, to be capitalized at NT$70 million (approx. ¥228 million), will have its head office in Taipei and build its plant in Tainan. SDK will own 80% of the company while Young Sun Chemtrade Co., Ltd., and Showa Specialty Gas (Taiwan) Co., Ltd., will own 10% each. The new company will adopt SDK’s purification technology and quality control system to provide high-quality product and services and ensure competitiveness of the operation.

Under the current medium-term consolidated business plan, the “Sprout Project,” SDK is putting emphasis on the semiconductor-processing materials operation as one of the “strategic growth businesses” and allocating substantial resources. SDK expects that its annual sales of semiconductor-processing materials, including specialty gases, will increase to around ¥50 billion by 2010, from ¥20 billion at present.

SDK utilizes waste plastic--used containers and wrapping for consumer products--as feedstock for the production of liquefied ammonia at Kawasaki. About a half of the annual output of approx. 120,000 tons is being produced from waste plastic.

[Reference]

Outline of the partners in Taiwan Showa Chemicals Manufacturing Co., Ltd.

  Young Sun Chemtrade Co., Ltd. Showa Specialty Gas (Taiwan) Co., Ltd.
Head office Taipei Taipei
Capital NT$231 million (approx. ¥750 million) NT$52 million (approx. ¥170 million)
Establishment April 1988 October 1995
Scope of business Trading of chemicals Import/export of specialty gases, high-purity chemicals and scrubbers for waste gas treatment; regeneration of the scrubbers

Note: Showa Specialty Gas (Taiwan) is owned 51% by SDK, 40% by Young Sun Chemtrade, and 9% by Tomen Corp.

For further information, contact:
Gases & Chemicals Division (Phone: 81-44-329-0764)