Asahi Glass Co., Ltd.

Asahi Glass, Co., Ltd. (Headquarters: Tokyo; President: Shinya Ishizu) decided to increase its manufacturing capacity of glass substrates used for TFT-LCD (Thin Film Transistor Liquid Crystal Display). With this increase the company will install new furnace of glass substrate at its Kansai factory and augment its glass panel polishing line in Taiwan. Engineering will commence from August of this year and is expected to be completed in October, 2003. Total funds to be injected into the project are estimated at 17 billion yen. The total production capacity as a result of this increase is estimated to be 10 million square meters annually, using four furnaces of glass substrates.

The demand for TFT-LCD displays is predicted to increase at a rate of 30% annually through the year 2005, since a steady increase is predicted not only for their use in notebook PCs, but even more so for their use in PC monitors. Their use in TVs is also expected to sky rocket. In addition, TFT-LCD substrate panel manufacturers announce they plan to use the large substrates to reduce their cost, and that in the future the "5th Generation Size" of glass substrates with a surface are exceeding one square meter, will be the industry mainstay.

Unlike many competitors, Asahi Glass incorporates floating method in manufacturing process of the glass substrates, which is suited to the mass production of large size. The company decided to increase the manufacturing capacity of its TFT-LCD glass substrates because it felt that the increasing demand for TFT-LCD displays and calls for larger glass substrates for TFT-LCD displays presented a great opportunity to further expand this business area and become the global leader in the impending. Details of the future capacity increase are as follows:

New Furnace of Glass Substrate
We will install the fourth furnace of TFT-LCD glass substrate at the Kansai Factory (Amagasaki City, Hyogo Prefecture). The new furnace will enable highly efficient multi-line production of ultra-large-sized substrates, primarily ultra-large glass substrates larger than one square meter, making possible the manufacture of glass substrates of approximately four meters in width. The manufacturing capacity of this furnace is four million square meters annually, nearly twice that of our existing furnaces, and requires a capital investment of roughly 12 billion yen.

Increased Glass Substrate Polishing Line
We will augment the TFT-LCD glass panel polishing line, which is targeted for the fifth generation size glass substrate, at Asahi Glass Fine Techno Taiwan Co., Ltd. (a fully owned subsidiary of Asahi Glass, Co., Ltd., located in Douliu City, Taiwan), which has been operating a polishing line since 2001. Capital investment for the new line is roughly five billion yen. Although Asahi Glass Fine Techno in Japan (a fully owned subsidiary of Asahi Glass, Co., Ltd., located in Yonezawa City, Yamagata Prefecture) also conducts polishing of TFT-LCD glass substrates, the line addition will be made in Taiwan, since future production volumes of TFT-LCD substrates will greatly increase there and since it is expected that Taiwanese TFT-LCD panel manufacturers will employ the 5th generation size of glass substrate before manufacturers in Japan do.

We will fully leverage the features of the float method, which is especially suited for larger glass substrates, to address increasing demand and proceed with the expansion of the TFT-LCD glass substrate business.

Asahi Glass Co., Ltd.

For inquiries regarding this announcement, contact Kenichi Imoto, Director, Corporate Communications Division, Asahi Glass Co., Ltd.

(Person in charge: Hatano, Tel: 03-3218-5915, E-mail: info-pr@om.agc.co.jp)

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