Shin-Etsu Announces Major Expansion of Its 300mm Silicon Wafer Production Capacity in Early Anticipation of Growing Global Demand.

Tokyo, Japan, Sept 22, 2006 - (JCN Newswire) - Shin-Etsu Chemical Co., Ltd. (TSE:4063) has announced a new plan to expand its monthly production capacity of 300mm silicon wafers to 1,000,000 by the fall of 2007 utilizing its Group's comprehensive strength as the world's largest manufacturer supplying 300mm wafers, for which global demand is rapidly growing. Construction to expand facilities has already started. This expansion will enable Shin-Etsu to establish a production system, which will promptly meet the rapidly growing its customers' demand worldwide, and to fulfill its responsibilities as the world's top maker of 300mm silicon wafers.

Shin-Etsu Chemical had been working to implement its plan to expand its Group's total production capacity of 300mm silicon wafer to 500,000/month by the fall of 2006; however, due to the continuation of robust demand, this project was completed earlier than planned and its Group's total production capacity has been currently increased to 700,000/month. Furthermore, since semiconductor customers are expected to newly construct or expand their production lines that make use of 300mm wafers, Shin-Etsu has now decided to establish a production system of 1,000,000 wafers/month by the fall of 2007.

The investment amount made for an additional capacity of 300,000 wafers will be 120 billion yen, and the accumulated amount invested in the 300mm wafer business by Shin-Etsu, including that of this investment, is expected to reach about 400 billion yen, all amount of which is covered by Shin-Etsu's own funds. As of the end of August 2006, Shin-Etsu Chemical had cash reserves of about 530 billion yen.

This latest expansion plan was decided upon by Shin-Etsu after taking into consideration all kinds of risks, including natural disasters such as earthquakes, damage caused by winds and floods and other such risks. The expansion plan will be carried out at Shin-Etsu Handotai's Shirakawa Plant, which has been playing a leading role in high-precision wafer processing; Shin-Etsu Handotai America (SEH America); and Mimasu Semiconductor Industry Co., Ltd., which became a Shin-Etsu Group company this year.

In addition, Shin-Etsu will make a new investment in Nagano Electronics Industrial Co., Ltd., another Shin-Etsu Group company. These investments will lead to the strengthening of Shin-Etsu's strategy of making use of strong multiple global production bases that can assure stable supply to customers

Furthermore, in addition to the planned expansions at the Shin-Etsu Handotai's Shirakawa Plant in Japan and at Shin-Etsu Handotai America's facilities in Vancouver, Washington, to disperse risk, it was decided to produce single crystal ingots at Shin-Etsu Handotai's Takefu Plant (in Fukui Prefecture, Japan). By means of these multiple production bases, an early increase of production capacity will become possible that will promptly meet changing market needs.

Shin-Etsu Handotai was the first company in the world to begin mass production of 300mm silicon wafers back in February 2001. Shin-Etsu Chemical continuously implemented further facility investment, expanding its production capacity to 300,000 monthly in 2004 and 400,000 monthly in 2005. While expanding production capacity, Shin-Etsu improved its technical strength and cost-competitiveness.

The demand for 300mm wafers is expected to continue to grow strongly in the future, and after achieving a production capacity of 1,000,000/month for 300mm wafers by the fall of 2007, Shin-Etsu will continue to place a high priority on unlimited investment for expansion as long as such investments are in accord with Shin-Etsu's investment standards and enable Shin-Etsu to speedily and accurately meet the growing demand from customers. Shin-Etsu plans to make these investments using its own funds.

About Shin-Etsu Chemical Co., Ltd.

The Shin-Etsu Group offers a broad array of market-leading products in its Organic and Inorganic Chemicals, Electronic materials and Functional Materials and Others businesses. The group has also pursued a global strategy from its early days of selecting the optimal production sites near its main markets and raw materials procurement sources around the world. Shin-Etsu focuses on cultivating businesses with future growth potential that contribute to the advancement of society while achieving consistently favorable results in daily business. For more information, please visit http://www.shinetsu.co.jp/e/

Source: Shin-Etsu Chemical Co., Ltd.

Contact:

Shin-Etsu Chemical Co., Ltd.
Public Relations Dept.
Ken Nakamura, or
Tetsuya Koishikawa
Tel: [phone],
or from outside Japan: 81-3-3246-5091
E-mail address: [e-mail]

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