Wacker NSCE will become a wholly-owned subsidiary of Wacker-Chemie group

Wacker-Chemie GmbH (”Wacker-Chemie”) group will purchase all of the shares of Wacker NSCE Corporation (”WNC”) owned by Nippon Steel Corporation (”NSC”) by September 30， 2003. (NSC currently owns 45% of the outstanding shares of WNC.) As a result， Wacker-Chemie group will own all shares of WNC.

In November 2000， Wacker-Chemie group made capital contribution to NSC Electron Corporation， then a wholly-owned subsidiary of NSC， which became WNC， a joint venture company with Wacker-Chemie group holding 55% shares and NSC holding 45% shares. Since then， WNC has cooperated with Wacker-Chemie group in areas such as technology， sales and R&D resulting in favorable synergistic effects. It has become necessary for Wacker-Chemie group to own all of the WNC shares and strengthen the collaboration between WNC and the group which has a wide variety of products and a global sales network in order to respond to the silicon wafer market needs and the customer request， in particular to the Japanese market.

In addition to the purchase of WNC shares， Wacker-Chemie group will undertake appropriate adjustments in respect of the production capacities of its silicon wafer business. Such adjustments will include (i) to close the 6-inch operation of WNC Hikari plant in the time frame of around the middle of 2004 and to transfer the 6-inch orders to other plants of the Wacker-Chemie group with the support of the customers； and (ii) to close the 8-inch operation of the WNC Malaysia plant by the end of 2003 and to concentrate the 8-inch orders on the WNC Hikari plant. These measures are part of the plan of Wacker-Chemie to increase the profitability of its silicon wafer business. By implementing such plan， Wacker-Chemie group will improve the capacity utilization of its overall silicon wafer business including WNC and establish a basis to conduct more efficient production responding to changes on market demand.

Wacker-Chemie group regards the Japanese market as very important and has a strategy to reinforce and expand its business in Japan through WNC. WNC will make its efforts to increase sales of high value-added products such as argon annealed wafers， SOI Technology which is under development in conjunction with the next generation wafer. WNC will strive to expand its business including possible introduction of 12-inch wafer lines in Hikari.

NSC has extended maximum cooperation to the WNC business as a joint venture partner. NSC considers that for further growth and development of WNC， it has become necessary for WNC to be a wholly-owned subsidiary of Wacker-Chemie group. This would also be compatible with NSC’s strategy of its corporate resources.

For inquiry， please contact:

Hiroshi Nakashima， Public Relations Center， NSC at 81-3-3275-5023
Shigehiko Wakuda， General Administration Division， WNC at 81-833-72-8406









(Reference)

1. Wacker NSCE Corporation
Representative Director President : Dr. Albrecht Paul Mozer
Capital : 13.5 billion yen (Wacker Group : 55%， Nippon Steel Corporation : 45%)
Total Assets : 45 billion yen
Head Office : Chuo-ku， Tokyo
Total Number of Employees : about 1，000
Sales : about 20 billion yen in 2002
Main Fabs : Hikari Fab (Hikari city， Yamaguchi prefecture) :
12” wafer line， 8” wafer line and 6” wafer line
Malaysia Fab (Kulim， Kedah state): 8” wafer line

2. Wacker Chemie GmbH
CEO : Dr. Peter-Alexander Wacker
Capital : 260.8 million euro (about 31.3 billion yen)
(calculation rate : 1 euro = 120 yen， same for bellow)
Total Assets : 2.762 billion euro (about 331 billion yen)
Head Office : Munich， Germany
Main Fab : Burghausen ， Germany (150 km east from Munich)
Total Number of Employees : about 17，000
Sales : 2.678 billion euro (about 321 billion yen) in 2002
Main Business : Production and Sales of silicon wafer， Chemical Products such as
sodium hydroxide， Silicon Products such as silica

3. Wacker Siltronic AG
100% subsidiary company of Wacker Chemie for Silicon Wafer business.
It has a fab in all four major markets which is Europe， USA， Southeast Asia， Japan.
CEO : Dr. Wilhelm Sittenthaler
Capital : 100 million euro (about 12 billion yen)
Total Assets : 1.248 billion euro (about 150 billion yen)
Head Office : Burghausen， Germany
Fabs : Burghausen and two other fabs in Germany
Portland， Oregon State， USA
Singapore
Malaysia and
Japan (Hikari)
Total Number of Employees : about 7，000
Sales : 1.017 billion euro (about 122 billion yen) consolidated with WNC base in 2002
Main Business : Production and Sales of Silicon Wafer and Polysilicon