Asahi Glass Co., Ltd. (Headquarters: Tokyo; President: Shinya Ishizu) decided to increase its production capacity of large-sized glass for glass substrates used in TFT-LCD (Thin Film Transistor Liquid Crystal Display) panels. The Company will construct a new glass furnace in Taiwan and a polishing line at its Kansai Factory for large-sized TFT-LCD glass substrates.
Total funds to be invested into the project are estimated at 18 billion yen. The construction will commence in July/August 2003, with commercial production scheduled to start at the new furnace in September 2004 and at the new polishing line in January 2004. After the completion of the new furnace, the total production capacity of the Company will be 14 million square meters par annum, when five furnaces, including three at the Keihin Factory and one under construction at the Kansai Factory, will be operating at full capacity.

Demand for TFT-LCD is growing faster than expected. It is projected to increase at a rate of more than 25% per annum. In addition to the demand for PC monitor, demand for TV is expected to grow significantly.
There are fears of possible shortage of TFT-LCD glass substrates, especially in larger glass substrares, since TFT panel manufacturers have started introducing fifth-generation size glass substrates with a surface of one square meter or larger, and plan to use even larger sixth- and seventh-generation glass substrates in order to reduce cost by utilizing large-sized glass substrates in mas production.

Unlike many competitors, Asahi Glass incorporates the float process in manufacturing TFT-LCD glass substrates, which is suited for the mass production of larger glass substrates. Its TFT-LCD glass substrates are less prone to warpage and do not shrink much during the heat treatment in the manufacturing process. With growing interest in environmental conservation, they are also highly valued by TFT-LCD panel manufacturers as "environmentally-friendly glass," which is free of arsenic and antimony.

The Company raised the production capacity of glass for TFT-LCD glass substrates to become the global leader in this business, benefiting from growing demand for larger substrates. Details of the planned capacity increase are as follows:

- New Furnace
The Company will construct a glass furnace of manufacturing glass for TFT-LCD glass substrates at Asahi Glass Fine Techno Taiwan Co., Ltd. (a wholly owned subsidiary of Asahi Glass Co., Ltd., located in Douliu, Taiwan). The new furnace will have an annual production capacity of four million square meters, the same as that of the furnace at the Kansai Factory, which will come on stream in October this year. The effective width of 4m, which is equivalent to the one in Kansai factory, will enable an efficient production of ultra-large-sized glass substrates .
Asahi Glass will set up its first overseas glass furnace for TFT-LCD glass substrates in a bid to timely meet demand from Taiwanese TFT-LCD panel manufacturers. Capital investment on the new furnace will be approx 13 billion yen.

- Polishing Line
The Company has decided to install a large-sized glass polishing line which can handle glass for TFT-LCD glass substrates of sixth-generation size, at its Kansai Factory (Amagasaki, Hyogo Prefecture). The new facility will enable the Company to supply glass for TFT-LCD glass substrates for Japanese TFT-LCD manufacturers' new production line on time, where mass production is expected to begin in 2004. Capital investment in the polishing line is approx 5 billion yen.

[Note]

1. Features of glass for TFT-LCD Glass Substrate of Asahi Glass
The Company is the only glass manufacturer in the world that employs the float process in the manufacturing process of glass for TFT-LCD glass substrates. The "AN100" grade put on the market in 1998, exhibits the following major features:

2. Flowchart of Asahi Glass' TFT-LCD Glass Substrate Manufacturing Process

* The furnaces at the Kansai Factory and Asahi Fine Techno Taiwan will be able to manufacture glass for TFT-LCD glass substrates with approximately four meters width.

3. Float process and Sizes of Glass Substrates

4. Outline of Asahi Glass Fine Techno Taiwan Co., Ltd.