Showa Denko K.K. (SDK) to Expand GaN-based Blue LED Chip Production Capacity to 200 Million Units a Month by June 2008.

Tokyo, Japan, July 18, 2007 - (JCN Newswire) - Showa Denko  K.K. (SDK) has decided to expand its production capacity of gallium nitride (GaN)-based blue LED chips at its Chiba site to 200 million units a month by June 2008, investing JPY 5 billion. The expansion is in addition to the ongoing work at Chiba to increase the blue LED chip production capacity from 30 million units a month to 100 million units a month by the end of 2007, as announced on February 20, 2007. (As of today, the production capacity has increased to 60 million units a month.)

While GaN-based blue LEDs are currently used in mobile phones and displays, demand for the product is expected to grow at the annual rate of nearly 20% in the coming five years, due mainly to the development of such new applications as LCD backlighting.

SDK this year is receiving orders for its GaN-based blue LEDs at a rate far exceeding original expectations. SDK therefore decided to expand its production capacity ahead of schedule with the aim of appropriately meeting customer requirements.

For the production of these blue LED chips, SDK is using its "Hybrid PPD(TM) process," a new process combining the conventional metal organic chemical vapor deposition (MOCVD) process and SDK's proprietary plasma assisted physical deposition (PPD(TM)) process for growing nitride-based semiconductor crystals.

The new process technology enables the use of four-inch epitaxial wafers with high quality, which is not possible with the conventional MOCVD process. With this technology, SDK aims to improve product quality and strengthen its competitive position, while achieving the highest-level brightness in the world.

Under the ongoing medium-term consolidated business plan, the Passion Project, SDK is aggressively expanding its ultrabright LED business, centering on GaN-based blue/green LEDs and aluminum-gallium-indium-phosphide (AlGaInP)-based red/orange/yellow/yellowish green LEDs. SDK positions the business as one of the "new growth driver" businesses, aggressively

allocating resources to this area. SDK is planning to increase annual sales of its ultrabright LED chips to JPY 20 billion by 2008.

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.

Source: Showa Denko K.K.

Contact:

Showa Denko K.K.
Nobuhiro Kato
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