Asahi Glass to Establish New Production Site for Large-sized TFT LCD Glass Substrates in Korea

Asahi Glass Co., Ltd. (TSE: ) has decided to branch out into the business of manufacturing and marketing non-alkali glass substrates for TFT LCDs (Thin Film Transistor Liquid Crystal Displays), for the first time for the Company, inGumi, the Republic of Korea, on the precondition of joint enterprise with Hankuk Electric Glass Co., Ltd. (Gumi, Gyeongsangbuk-do, Korea) in which Asahi Glass has a 42.76% holding.

The new business will be established in May 2004, and a polishing line for glass substrates will be installed with an investment of approximately 9 billion yen. The construction of the polishing line is scheduled to start in August 2004, with commercial production slated to start in July 2005.

Demand for TFT LCD panels is growing faster than expected, and is projected to increase at a rate of 25% per annum in terms of volume. In addition to demand for PC monitors, demand for TVs is expected to grow significantly, with events such as the Olympic Games and the soccer World Cup in the offing. Given the shift towards larger panels for TVs, demand for glass substrates is expected to grow substantially, exceeding growth in demand for the panels themselves. There are fears of a further strained supply-demand situation for TFT LCD glass substrates, especially for larger sizes.

Asahi Glass currently produces glass substrates in its Kansai and Keihin Plants in Japan, and performs polishing processes in Kansai Plant, Asahi Glass Fine Techno (Yonezawa, Japan; 100% owned by Asahi Glass) and Asahi Glass Fine Techno Taiwan (Douliu, Taiwan; 100% owned by Asahi Glass). To respond to ongoing strong demand for glass substrates, Asahi Glass will substantially increase its production capacity by installing additional furnaces (two) and polishing lines in Taiwan from September 2004 to April 2005.

Meanwhile, with regard to demand for TFT glass substrates by country/region, Asahi Glass estimates that Japan accounted for 30%, Korea 40% and Taiwan 30% in 2003. This time, Asahi Glass has decided to establish its first production site in Korea where growth of demand, especially for large-sized LCD panels, can be expected in the future. Establishment of the new company and installation of the polishing line are the first steps to expand its presence in Korea, and Asahi Glass will make the necessary investments to ensure a stable supply to customers in response to the growing demand for glass substrates expected well into the future. In branching out into Korea, Asahi Glass is proactively utilizing the excellent foreign investment
support system provided by the Korean government and municipalities.

600450 Asahi Glass to Establish New Production Site for Large-sized TFT LCD Glass Substrates in Korea
Date: 27 May 2004

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