Business News | Dec 12, 2006

Showa Denko K.K. to increase ultra bright red/yellow LED capacity

Tokyo, Japan--Showa Denko K.K. (SDK) has decided to increase its capacity for producing aluminum-gallium-indium-phosphide (AlGaInP) ultra bright LED chips to meet growing demand for use in LCD backlighting and automotive parts.

Specifically, the production capacity will be increased from 30 million units a month at present to 100 million units a month. Expansion work will start in February 2007 for completion in the third quarter of the same year.

SDK will invest approximately JPY 1.5 billion in this project, centering on expansions of a metal organic chemical vapor deposition (MOCVD) furnace for the production of epitaxial wafers, chip-making facilities, and the clean room.

While AlGaInP ultra bright LED chips are now mainly used in displays, automotive parts and traffic lights, development is under way for such new applications as LCD backlighting and light source for sensors. Thus, demand for AlGaInP ultra bright LED is expected to grow at an annual rate of around 40% in the coming five years. This year, we are seeing a sharp increase in the amount of orders we receive from overseas customers. Furthermore, in view of the Japanese customers' high valuation of our product, we expect more and more customers will start commercial use of our product in and after 2007. We will therefore expand our production capacity to fully meet increasing requirements.

Our AlGaInP ultra bright LED chips, which are based on proprietary technologies, produce diverse colors, such as red, yellow, and orange. We can also provide these LED chips of large or special sizes as required by respective customers. SDK aims to expand its ultra bright LED business as a new "growth-driver" business, by developing still brighter LED chips. Thus, SDK will meet a rapidly growing demand for LEDs for LCD backlighting and automotive parts applications. In addition, SDK will accelerate the development of AlGaInP ultra bright LED chips for general lighting, a new promising application to be commercialized in the future. SDK is planning to sell over \2 billion of this product line in 2007 and double the sales in 2008.

Terminology
1) AlGaInP LED: A compound semiconductor that can emit red, orange, yellow or yellowish green lights based on different compositions.
2) Epitaxial wafer: A thin semiconductor slice produced by having layers of different types of semiconductors deposited on a single-crystal substrate.
3) Light source for sensors: An application in which the light of LED is sensed by a mechanical eye installed in a shielding sensor or an auto-focusing digital camera.

About Showa Denko K.K.
Showa Denko K.K. ('SDK'; TSE: 4004, US: SHWDF) is a major manufacturer and marketer of chemical products serving a wide range of fields ranging from heavy industry to the electronic and computer industries. SDK makes petrochemicals (ethylene, propylene), aluminum products (ingots, rods), electronic equipment (hard disks for computers) and inorganic materials (ceramics, carbons). The company has overseas operations and a joint venture with Netherlands-based Montell and Nippon Petrochemicals to make and market polypropylenes. In March 2001, SDK merged with Showa Denko Aluminum Corporation to strengthen the high-value-added fabricated aluminum products operations, and is today developing next-generation optical communications-use wafers. For more information, please visit www.sdk.co.jp.

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