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SDK to Build Its Fourth HD Media Plant in Singapore

November 29, 2005

Showa Denko K.K. (SDK) has decided to build a new hard disk (HD) media plant in Singapore to meet rapidly increasing demand. The new plant, the fourth HD media plant for SDK and scheduled for start-up in November 2006, will produce both aluminum- and glass-substrate media with diameters ranging from 0.85 inch to 3.5 inches. Construction will begin next month with a groundbreaking ceremony on December 2 at a 68,000-square-meter site in the Pioneer Crescent area.

HD media is now in tight supply due to rapid increases in demand for such consumer electronics applications as DVDs and mobile music players in addition to the conventional PC applications. Demand is expected to continue to grow at an annual rate of 15% or more as new mobile phones containing HD drives will be launched next year.

To achieve high storage capacity necessary for recording moving pictures, the surface of HD media needs to be processed precisely at the nanometer level. Furthermore, HD drives for consumer electronics applications are required to have high levels of reliability, resulting in increased need for high-quality media.

In June this year, SDK became the world’s first to commercialize HD media based on the perpendicular magnetic recording technology. In July, SDK also commercialized 0.85-inch diameter HD media, the smallest size in the world. Thus, SDK has the leading position in the technical development of HD media and the largest production capacity as an independent supplier. As customer demand exceeds our capacity, however, we have decided to build a new plant.

SDK will invest approximately ¥10 billion to construct the building and a clean room. After the completion of the clean room, production facilities will be installed step by step.

As announced earlier, SDK will increase its total HD media production capacity at the three existing plants from 10.7 million disks per month at present, to 13.75 million disks per month, by March 2006. SDK will further increase the capacity to 24 million disks per month by 2008, including the capacity at the new plant in Singapore.

[Reference]

Forecast of HD media demand

New HD media plant in Singapore (conceptual drawing)