June 15, 2005Management

Asahi Glass to Enter into Business of Glass Substrates for HDDs

Asahi Glass Co., Ltd. (Head Office: Tokyo; President & CEO: Masahiro Kadomatsu) will expand its Electronics and Energy materials operations on a full-scale basis as part of the medium-term management plan "JIKKO-2007," which started this fiscal year. As part of the initiatives, Asahi Glass has decided to enter into the business of manufacturing and selling glass substrates for hard disk drives (HDDs), which are expected to be widely used for consumer electronics for which the market is forecast to rapidly expand. A fresh demand for HDDs is also expected from manufacturers of products in which HDD's functions can be fully utilized, including mobile phones.

The market for HDDs used in personal computers and car navigation systems is estimated to grow by 10% or more every year, and demand for glass substrates for use in HDDs is forecast to rise by about 30% annually. Recently, the use of HDDs has also spread into digital home electronics and portable music players. Furthermore, it is anticipated that HDDs will soon be increasingly used in mobile phones. As the application of HDDs becomes diverser, the use of more compact HDDs---such as 1.8-, 1.0- and 0.85-inch models---has been increasing, in addition to 2.5-inch disks that are widely used for notebooks. At the same time, HDDs, which utilize perpendicular magnetic recording technology to further increase storage capacity, are expected to be produced in volume.

Asahi Glass possesses technologies for polishing glass for liquid crystal displays or for semiconductor manufacturing equipment (synthetic quartz) as well as for various other types of precision glass. Regarding glass substrates for HDDs, for many years now, Asahi Glass has been researching and developing glass materials, and technologies for circular processing, precision polishing and cleaning. In order to expand the electronics and energy materials operations through the integrated use of these technologies, Asahi Glass has opted to enter the HDD glass substrate business, which is expected to grow in the future.
   The following are the strong suits of Asahi Glass in glass substrates for HDDs.

1. Anticipating that its customers would adopt perpendicular magnetic recording technology in their manufacturing processes, Asahi Glass is utilizing high strain point glass for its substrate. Hence, the company has the competitive advantage of processing glass substrates at higher temperatures than its peers are capable of.
2. To harden the glass, Asahi Glass has developed its own proprietary technology, unlike the commonly used chemical techniques. With this proprietary technology, Asahi Glass now can produce glass substrates with a high thermal resistance. This substrate can also maintain its strength even if it is thin.

Currently, Asahi Glass is making such glass substrates for HDDs on an experimental basis at its Japanese plants seeking to produce them in volume. Asahi Glass also plans to begin manufacturing this substrate in October 2005 at Asahi Glass Precision Technology Co., Ltd., a wholly owned Thai subsidiary established in January 2005. This project is estimated to require about 2.0 billion yen. Through these efforts, Asahi Glass aims to earn about 10.0 billion yen in sales from this business in 2007.

   To meet its customers' needs, Asahi Glass is striving to continuously develop better materials and polishing technologies, as well as proactively expand this business by accurately identifying trends in glass substrate demand.

1. Glass substrate supply chain

2. Asahi Glass Precision Technology Co., Ltd.
(1)Location: Ayutthaya, Thailand
(2)Capital: 194 million THB
(3)Shareholder: Asahi Glass (100%)
(4)Establishment: January 2005
(5)Start of production: October 2005

3. Glass substrate (1 inch) manufactured by Asahi Glass

For further information, please contact:
Shinichi Kawakami, General Manager, Corporate Communications & Investor Relations Division, Asahi Glass Co., Ltd.
Direct inquiries: Yoshihiko Saito
TEL: +81-3-3218-5509
E-mail: info-pr@agc.co.jp