Sumitomo Metals Decides to Subscribe to Preferred Shares of SUMCO

The Board of Directors of Sumitomo Metal Industries, Ltd. (Sumitomo Metals) decided today to subscribe to the class A shares (preferred shares) of SUMCO Corporation (SUMCO) through a third-party allotment. SUMCO is an equity-method affiliate of Sumitomo Metals.

1. Reasons for subscription of class A shares (preferred shares)

SUMCO has announced its “Business Reorganization Plan” to improve profits through withdrawal from some businesses, consolidation of production sites, and measures concerning its workforce. Costs associated with execution of the plan are expected to decrease SUMCO’s net worth significantly. In response to this, SUMCO decided to request subscription to its issue of preferred shares by means of a third-party allotment.

Sumitomo Metals decided to accept SUMCO’s request for subscription for the class A shares in the amount of 15 billion yen as we believe the execution of the “Business Reorganization Plan” and improvement of SUMCO’s profitability will lead to increase in its corporate value.

2. Sumitomo Metals’ subscription of class A shares (preferred shares)
(Please refer to SUMCO’s release “Notice on Issuance of Shares by Third-Party Allotment” which was published today for further details.)

(1) Subscription price	100 million yen per share
(2) Type and number of shares      to be subscribed	150 shares of class A shares
(3) Total amount of subscription	15 billion yen of the total 45 billion yen issue
(4) Due date of payment	May 11, 2012
(5) Preference dividend rate	2.5% (cumulative)
(6) Rights to acquire shares of      common stock	Sumitomo Metals to have the rights to acquire shares of common stock after 3 years from the due date of payment of the class A shares
(7) Rights of recourse	Sumitomo Metals to have the rights to request recourse of the shares up to the distributable amount as dividend, as stipulated by the Companies Act of Japan after 3 years from the due date of payment of the class A shares.　In case of a recourse, Sumitomo Metals will receive class B shares for the amount equivalent to 20% of the recourse amount.

3. Corporate Data regarding SUMCO

(1) Corporate name	SUMCO Corporation
(2) Representative	Yoichi Taguchi
(3) Head office	1-2-1 Shibaura, Minato-ku, Tokyo 105-8634
(4) Established	July 30, 1999
(5) Main businesses	Manufacture and sales of silicon wafers for semiconductors and solar cells
(6) Fiscal year	Ends at the end of January
(7) Number of employees	8,814 (consolidated, as of December 31, 2011)
(8) Net assets	208.2 billion yen (consolidated, as of Oct. 31, 2011)
(9) Total assets	523.5 billion yen (consolidated, as of Oct. 31, 2011)
(10) Capital	114.1 billion yen (consolidated, as of Oct. 31, 2011)
(11) Total outstanding shares         Shares held by Sumitomo Metals	257,751,000 shares of common stock 71,700,000 shares of common stock (27.82%)

4. Impact on Sumitomo Metals’ earnings
The subscription for the preferred shares is not expected to affect Sumitomo Metals’ earnings for the current fiscal year ending on March 31, 2012.