Showa Denko Buys Fujitsu Hard Disk Media Activity

Fujitsu Limited and Showa Denko K.K. have signed a memorandum of understanding on the transfer of Fujitsu’s hard disk drive (HDD) media business, operated by Fujitsu subsidiary Yamagata Fujitsu Limited, to Showa Denko. The companies aim to complete the transfer of the business in the April-June second quarter of calendar year 2009.

To facilitate the transfer, Fujitsu will reorganize the HDD media operations of Yamagata Fujitsu into a new company. All shares of the new company will then be sold to Showa Denko. The two companies plan to conclude a definitive transfer contract by the end of March, and to complete the transfer by June 30. Discussions on the detailed terms of the transfer are ongoing.

Yamagata Fujitsu manufactures aluminum media for HDDs used in servers, and develops and manufactures glass media for compact HDDs used in notebook computers and car electronics. All of the media products the company manufactures are sold to Fujitsu.

By acquiring Fujitsu’s HDD media business, Showa Denko will strengthen its media offerings for server drives and position itself to build a stable customer base. The acquisition also gives Showa Denko immediate access to the HDD media-related research and development capabilities, manufacturing know-how, and intellectual property owned by Yamagata Fujitsu and its parent company. Showa Denko will reinforce its technical leadership in the media industry by merging these capabilities with its own.

The HDD market is expected to continue to grow in the future as HDDs remain critical storage components for notebook PCs and consumer electronics. At the same time, the capacity of HDDs is expected to increase sharply, and it will be critical for media manufacturers to invest in the development of next-generation magnetic recording technologies and continue to provide timely support to HDD drive manufacturers.

Amid these trends, Fujitsu and Showa Denko agreed that in order to ensure the growth of the HDD media business, it was necessary to integrate their technologies and improve the efficiency of their operations. Showa Denko will enhance its development capabilities and overall competitiveness by integrating the capabilities of Yamagata Fujitsu.

As the world’s largest independent vendor of HDD media, Showa Denko will continue to meet the volume and technical needs of its customers.

Overview of the New Company

Establishment Date (Scheduled): In April-June second quarter of calendar year 2009
Capital Ratio: 100% to be owned by Showa Denko
Business Description: Development, manufacturing and sales of HDD media
Number of Employees: Approximately 360

Schedule

March 31, 2009: Sign definitive transfer contract (scheduled)
By June 30, 2009: Establish new company, complete transfer (scheduled)