Shaping Ideas

Imagination alone leads nowhere.

Only when imagination is shaped into reality does

the world begin to change.

｠

At Showa Denko, we are committed to shaping ideas.

Each one of us strives completely in all we do,

believing that the dreams of humankind can be realized through

the power of chemical technology.

｠

Today, as a company, we are becoming bolder and more dynamic.

Not only diligent and technology focused, we are a vital,

proactive group of unique minds that emphasizes fresh

thinking and new ways to apply

our extraordinary technical expertise.

｠

Closely working and partnering with leading global

companies in markets around the world,

we are shaping ideas

that realize humanity’s hopes

and dreams for more abundant and happier lives.

◎Showa Denko’s Promise

◎Message from the President

Evolving into a Company that

Creates Added Value

President and CEO Showa Denko K.K.

Hideo Ichikawa

While the U.S. economy remains steady and the depressed Euro zone is now heading for recovery, emerging economies’ full-scale recovery is not in sight owing to the unsettled problem of overproduction of steel and chemicals in China. In Japan, the government’s monetary relaxation and increased public spending have contributed to the easing of the yen’s appreciation and higher share prices, resulting in remarkable recovery of demand for manufactured goods for specific industrial applications. Nevertheless, in many areas, including general commodity materials, the rate of recovery is still slow. The business environment surrounding the Showa Denko Group is expected to remain severe, reflecting higher costs due to the rise in electricity rates and worsening trade terms due to excess of supply over demand.

Under these circumstances, the Showa Denko Group is promoting its five-year consolidated business plan PEGASUS launched in 2011. In accordance with our new “Phase ” business plan for the 2014-2015 period, which covers the latter part of PEGASUS, we will focus our efforts on implementing profitability-improvement measures so as to return to a growth track. Under “Phase ,” we will continue to promote our growth strategies in which the hard disk (HD) media and graphite electrode businesses serve as “Wings.” Furthermore, we will accelerate expansions in overseas market in the areas of semiconductor-processing high-purity gases, functional chemicals, high-purity aluminum foil, and aluminum cans. In these business segments, which we have classified as “Growth” businesses, we are globally competitive owing to our proprietary technologies. As for businesses in the “Base (Stable)” category, we will work to recover and improve their profitability. Thus, we will reform these businesses so that they will again become contributors toward creating stable profit and cash flows.

By “Shaping Ideas,” we will steadily implement these measures to ensure that the Showa Denko Group will speedily return to a growth track.

Leveraging its proprietary and outstanding technologies, Showa Denko will continue to accelerate research and development activities targeting materials and components that will lead advanced technology fields. Thus, we will provide superior products and services to customers around the world.The Showa Denko Group will continue to expand its diverse businesses on a global scale, contributing toward creating a society where affluence and sustainability are harmonized.

January 6, 2014

◎Business Policies

Medium-term consolidated business plan PEGASUS（2011～2015）

Evolution of business portfolio

New Growth Base (Growth)

Base (Stable)

Growth

■Rare earths

■Petrochemicals

■Fuel cell catalysts

■LEDs ■Shotic™

■High-purity aluminum foil

■Aluminum cans

■LBP cylinders

■LIB materials

■Semiconductor- processing high- purity gases

■Functional chemicals

■Basic chemicals/ Industrial gases

■Inorganic functional materials

■GE

■HD■SiC epi-wafer for power devices

Phase（2011-2013）

Post-PEGASUS

Phase（2014-2015）

Under “Phase 　,” which covers the latter part (2014-2015) of the medium-term consolidated business plan PEGASUS, we will focus our efforts on accelerating overseas operations, improving the profitability of “Base (Stable)” businesses, reducing costs, and promoting alliance and M&A.

Carrying out “PEGASUS Phase　”

Phase

We have revised our business portfolio under “Phase ” in view of the changes in the environment. While the HD media and graphite electrode businesses continue to serve as “Wings,” we have newly classified four businesses, including functional chemicals and aluminum cans, as “Growth” businesses. We will strengthen these businesses in terms of scale and profitability. As for businesses in the “Base (Stable)” category, we will improve their profitability by developing high-quality products and advanced technologies. In the “New Growth” category, we will establish our businesses in silicon carbide (SiC) epitaxial wafers for power devices and lithium-ion battery (LIB) materials, working to expand their business scale.

◎ Introduction of business segments

Providing ethylene, propylene and other basic petrochemicals; and organic chemicals derived from them, including acetyls and allyl alcohol derivatives.

Petrochemicals［Petrochemicals Div is ion (Olef ins Depar tment , Organic Chemicals Depar tment )］

Providing a wide range of products, from industrial gases, industrial chemicals, high-performance chemicals, and elastomers to high-purity gases and chemicals for the semiconductor industry, reinforced plastics, biodegradable resins, and resin composites.

Chemicals［ Industrial Gases Division,Basic Chemicals Division(Ammonia & Derivatives Department, Soda & Derivatives Department) ,Electronic Chemicals Division, Functional Chemicals Division(Functional Polymers Department, Specialty Chemicals Department )]

Providing ceramic products such as alumina, polishing materials, abrasives, and refractories; graphite electrodes for electric steelmaking; and high-performance carbon products.

Inorganics［Ceramics Division,Carbons Division］

Providing aluminum materials, including rolled, extruded, and forged products; and various high-value-added fabricated aluminum products, such as high-purity aluminum foils for capacitors, aluminum cylinders for laser beam printers, and aluminum cans for beverages.

Aluminum［Aluminum Rolled Products Division, Aluminum Specialty Components Division, Aluminum Can Division, Cooling Device Development Department］

Providing compound semiconductor materials for ultrabright and high-output LEDs; and rare earth magnetic alloys for high-performance motors , and HD media with high storage capacity, for use in PCs; consumer electronics such as DVD recorders and game machines; and servers for data centers.

Electronics［Electronics Materials Division,HD Division］

Providing lithium-ion battery materials, including anode materials and conductive additives; and fuel-cell components such as carbon-based separators. Developing new materials for battery applications, where technological innovation is going on.

Advanced Battery Materials Department

◎Introduction of businesses

“Shaping Ideas” to enrich people’s lives through recording of all kinds of information HD media are used in a growing range of applications; not only in PCs but also in DVD recorders, flat-screen TVs, video cameras, and servers for data centers, where demand is increasing as a result of the shift toward cloud computing. As the world’s largest independent supplier, Showa Denko is producing HD media at its six production bases located inside and outside Japan. By constantly pursuing the world’s most advanced technologies and quality, we are contributing to the creation of more convenient and comfortable lifestyles.

Using cutting-edge technologies, we have developed products with ever-increasing storage capacities. We have put in place optimum production and supply systems to respond smoothly to worldwide demand.

HD media

Showa Denko manufactures high-quality graphite electrodes at its two production bases, namely, in Omachi, Nagano Prefecture, Japan; and in South Carolina, USA. Graphite electrodes are essential in melting iron scrap in electric arc furnaces for recycling into steel, which is then used for building material and other applications. We have the leading share in the global market for high-quality large-diameter electrodes, including the world’s largest 32-inch-diameter electrodes. These products of ours are well received by users around the world.

Graphite electrodes

“Shaping Ideas” to create a bridge to the future through the recycling of ironIron is one of the earth’s limited resources.Demand for steel will continue to increase, as emerging countries build their infrastructure. Showa Denko’s graphite electrodes have become the focus of high expectations from users around the world. This is because graphite is the only material that can withstand the harsh conditions, with temperatures reaching 3,000°C, required to melt iron scrap for recycling into steel. We are building a bridge, not only to the future of iron, but also to the future of mankind. 　　　　　　　　　　　　　　　　　　　　　　　

High-purity gases for semiconductor processing are used in the production of semiconductors, LCD panels, LEDs, and solar cells. Showa Denko manufactures many of these essential gases, including hydrogen, ammonia, chlorine, and fluorine gases.

High-purity gases for semiconductor processing

“Shaping Ideas” to transform sunlight into energySolar cell technologies have gained considerable attention recently amid increasing demand for new forms of energy that take environmental impact into consideration. The high-purity gases for semiconductor processing produced by Showa Denko are essential to the solar cell manufacturing process. Electronic circuits that are invisible to the human eye cover the solar cell surfaces, and the high-purity gases for semiconductor processing are used to create these electronic circuits with a high degree of precision. We support technologies for transforming natural forces into essential energy, from behind the scenes.

The demand for rare earths is growing in fields such as drive motors for hybrid cars, energy-saving home electric appliances, and factory automation using computer control technologies. As the largest magnetic alloy manufacturer in Japan, Showa Denko is diversifying procurement and expanding production and, at the same time, strengthening the development of next-generation magnets with lower rare-earths content. Our goal is to become the world’s top high-performance magnetic alloy maker.

Rare earths

“Shaping Ideas” to efficiently transform the wind’s force into the power that drives societyLike solar cells, wind power generators are expected to create safe, reliable energy for many generations to come. Huge windmills are used to capture the wind and generate clean, natural energy. Permanent magnets are essential to efficiently transforming wind’s force into electrical energy. The rare earth magnetic alloys provided by Showa Denko are used for producing these magnets. By increasing the efficiency of these magnets, we help deliver vital energy to all of society.

High-purity aluminum foil is a key material in electronic components essential to IT devices, home electric appliances, and automobiles. High-purity aluminum foils for capacitors are produced through precise control of purity and manufacturing processes.

High-purity aluminum foils

Due to its light, strong, and corrosion-resistant characteristics, Rigolac™ is used in wide-ranging applications, including automotive parts, home electric appliances, and ocean development.

SUPER-TITANIATM high-purity titanium oxide is used as one of the main materials in ceramic capacitors installed in familiar electronic and electrical devices.

Unsaturated polyester resin

ECOANNTM ammonia, which is made from recycled plastics, is used in cleaning exhaust gases and for other applications.

Environment-friendly ammonia

Ceramics for capacitors

“Shaping Ideas” to provide efficient solutions to the energy issue

While the development of natural energy is drawing attention, people are also interested in more efficient ways of using energy. In this connection, attention is focused on next-generation power devices. SiC epitaxial wafers, which Showa Denko has developed, help minimize electricity loss. The product is already commercially used in subways, and will be utilized in electric vehicles in the near future. By taking a step forward in the development of advanced technologies, we are contributing to significant progress in settling the energy issue.

In the rapidly growing lithium-ion battery (LIB) market, Showa Denko offers long-life anode material (SCMGTM), aluminum packaging materials that boast the top market share, and additive in anodes/cathodes (VGCFTM), a unique product with high quality and stability.

Battery materials

Showa Denko has developed SHORAYALTM film, achieving both high transparency and heat resistance.It is being marketed as glass-substitute product for use in displays such as touch screens and LCDs.

Heat-resistant transparent film

We have realized a full lineup of high-output LED chips that cover a wide range from ultraviolet to infrared. These LED chips are being used in various areas, including displays, sensors, and plant growth facilities.

LEDs

Aluminum cylinders are a core component in laser beam printers. Demand for these components is expected to grow with the ongoing shift to color laser printers.

Aluminum cylinders for laser beam printers

“Shaping Ideas” that foster not only new markets, but new life as wellShowa Denko is taking the lead in new market areas, such as LED chips that are expected to replace incandescent/fluorescent lamps and illumination panels, and organic electroluminescent (organic EL) for lighting. Showa Denko has also succeeded in developing aluminum-gallium-indium-phosphide (AlGaInP) LED chips that emit red light with wavelength of 660 nm, which is best suited to the cultivation of plants. This technology is expected to be used in a variety of applications, including facilities for growing lettuce and other vegetables under artificial light.

The Group has continued aluminum can recycling activities for more than 40 years, donating the earnings from these activities to welfare offices in the neighborhood of our plants. For these activities, we recently received the Minister of Economy, Trade and Industry’s Prize through the Reduce, Reuse and Recycle Promotion Council. We will continue the activities, which have taken firm root in local communities.

Recycling activities in collaboration with schools and residents’ associations

Employees of Showa Denko HD Yamagata K.K. participate in cleaning activities on the occasion of local marathon events.Likewise, employees at Oyama, Isesaki, and other Showa Denko plants as well as at Showa Denko Ceramics Co., Ltd. and other Group companies are participating in cleaning activities in close cooperation with respective local communities.

Participation in cleaning activities of local communities

Showa Denko’s head office participates each year in the “Summer Chemistry Experiment Event for Children” sponsored by the Japan Chemical Industry Association. The event provides an opportunity for many children to have a lot of fun,conducting chemistry experiments.

For the children’s future

◎ Corporate social responsibility (CSR) activities

“Shaping Ideas” that contribute to the environment in collaboration with the communityShowa Denko strives to maintain and strengthen its relationships with regional communities not only through environmental protection, but also through recycling activities. Based on this approach, in 1972, the Showa Denko Group, which covers aluminum can production, began independently collecting aluminum cans and re-using these materials. Showa Denko expanded its circle of collaboration to include various group companies, business partners, and regional communities. These activities generate income for schools and other facilities, and also help in the operation of schools and schoolchildren councils, and in securing economic independence for people with disabilities.

Fukuoka Branch

Osaka Branch

SunAllomer Ltd. Japan Polyethylene Corporation

Nagoya Branch Head Office

O i t a C om p l e x

Hikone Plant

Sakai Plant

Tatsuno Plant

Tokuyama Plant

Omachi Plant

Shiojiri Plant

Kitakata Plant

Higashinagahara Plant

Oyama Plant

Nasu Plant

Isesaki Plant

Chichibu Plant

Kawasaki Plant

Yokohama Plant

Chiba Plant

Institute for Advanced and Core Technology

Analysis & Physical Properties Center

Safety Evaluation Center

Institute for Polymers and Chemicals

Process Solutions Center

Employees of Showa Denko HD Yamagata K.K. participate in cleaning activities on the occasion of local marathon events.Likewise, employees at Oyama, Isesaki, and other Showa Denko plants as well as at Showa Denko Ceramics Co., Ltd. and other Group companies are participating in cleaning activities in close cooperation with respective local communities.

Showa Denko’s head office participates each year in the “Summer Chemistry Experiment Event for Children” sponsored by the Japan Chemical Industry Association. The event provides an opportunity for many children to have a lot of fun,conducting chemistry experiments.

◎Domestic Production / R&D Facilities

◎Group Companies

Petrochemicals

Showa Denko Gas Products Co., Ltd.Tokyo Liquefied Oxygen Co., Ltd. Nippon Polytech Corp. Union Showa K.K.

Chemicals

Showa Denko Ceramics Co., Ltd.Showa Denko Kenso Co., Ltd.Tohoku Metal Chemical Co., Ltd.

Inorganics

Showa Aluminum Can Corp.Showa Denko Aluminum Trading K.K. Showa Denko Sakai Aluminum K.K.

Aluminum

Showa Denko HD Yamagata K.K. Showa Denko Electronics

Electronics

Shoko Co., Ltd. Showa Denko Kenzai K.K.Showa Denko Packaging Co., Ltd.

Related Businesses

◎Overseas Sales / Production Base

E a s t A s i aP r o d u c t i o n B a s e

Shanghai Showa Chemicals Co., Ltd.

Shanghai Showa Highpolymer Co., Ltd.

Shanghai Showa Electronics Materials Co.,Ltd.

Shodex China Co.,Ltd.

Shanghai Showa Highpolymer Trading Co., Ltd.

Zhejiang Quzhou Juhua Showa Electronic Chemical Materials Co., Ltd.

Liayungang Zaoling Abrasives Co., Ltd.

Showa Denko (Dalian) Co., Ltd.

Showa Denko Aluminum (Nantong) Co.,Ltd

C h i n a

C h i n a

C h i n a

C h i n a

C h i n a

C h i n a

C h i n a

C h i n a

C h i n a

Chemicals

Chemicals

Chemicals

Chemicals

Chemicals

Chemicals

Inorganics

Aluminum

Aluminum

Segment C o u n t r y P r o d u c t i o n B a s e

Ganzhou Zhaori Rare Earth New Materials Co., Ltd.

Baotou Showa Rare Earth Hi-tech New Material Co., Ltd.

Showa Denko (Shanghai) Co., Ltd.

Showa Specialty Gas (Taiwan) Co., Ltd.

Taiwan Showa Chemicals Manufacturing Co., Ltd.

Showa Denko HD Trace Corp.

Taiwan Showa Denko Electronics Co., Ltd.

Korea Showa Chemicals Co.

C h i n a

C h i n a

C h i n a

Taiwan

Taiwan

Taiwan

Taiwan

K o r e a

Electronics

Electronics

O t h e r

Chemicals

Chemicals

Electronics

Electronics

Chemicals

Segment C o u n t r y

A s i a ( O t h e r )P r o d u c t i o n B a s e

Showa Specialty Gas Singapore (Pte.) Ltd.

SHOTIC (Singapore ) Pte. Ltd.

Showa Denko HD Singapore Pte. Ltd.

Showa Denko Singapore (Pte.) Ltd.

P.T. Showa Esterindo Indonesia

Singapore

Singapore

Singapore

Singapore

Indonesia

Chemicals

Aluminum

Electronics

O t h e r

Petrochemicals

Segment C o u n t r y P r o d u c t i o n B a s e

P.T. Indonesia Chemical Alumina

Eternal Showa Highpolymer Co., Ltd.

Showa Denko Rare-Earth Vietnam Co., Ltd.

Showa Aluminum Manufacturing Philippines Corporation

Showa Denko HD (Malaysia) Sdn. Bhd.

Indonesia

Thailand

V i e t n am

Philippines

Malaysia

Inorganics

Chemicals

Electronics

Aluminum

Electronics

Segment C o u n t r y

E u r o p e No r t h Ame r i c aP r o d u c t i o n B a s e

F2 Chem ic a l s L im i t ed

SHOTIC Europa -Industria de Aluminio Lda.

Showa Denko Europe GmbH

UK

Portugal

Germany

Chemicals

Aluminum

O the r

Segment C o u n t r y P r o d u c t i o n B a s e

Showa Denko Carbon, Inc.

Showa Aluminum Corporation of America

Showa Denko America, Inc.

U S

U S

US

Inorganics

Aluminum

O the r

Segment C o u n t r y

Eu rope

North America

East Asia

Asia( o t he r )

Showa Denko K.K.13-9, Shiba Daimon 1-chome, Minato-ku, Tokyo 105-8518Phone: 81-3-5470-3235 ( PR Off ice)Website: http://www.sdk.co.jp/

2014 FEB 　 3,000