Showa Denko increases capital by 109.3 billion yen to increase production of semiconductor materials

Showa Denko of Japan announced on the 23rd that it will raise approximately 110 billion yen through public offerings in Japan and overseas, and the proceeds will be used for capital investment to increase the production capacity of semiconductor materials. The former Hitachi Chemical acquired the current Showa Denko Materials for approximately 1 trillion yen in 2020.

Based on demand, the company will issue a total of 35.19 million new shares through public offering and additional issuance (over-allotment), which is equivalent to more than 20% of the current number of issued shares.

The maximum planned purchase amount is 109.3 billion yen, of which about 70 billion yen will be allocated to semiconductor-related products.

Showa Denko said that first, we will invest 24.8 billion yen to increase the production capacity of "copper clad laminates" and "photosensitive films" used for printed circuit boards in Japan and overseas. The abrasives for semiconductor front-end processes, which has the largest global share, will invest 23.2 billion yen to improve quality and production capacity. The company will also invest 11 billion yen in bases where customers' semiconductor-related manufacturers can combine cutting-edge materials to make prototypes and enhance their facilities.

In addition, 5.9 billion yen will be invested to increase the production of high-purity gases used in processing electronic materials, and 5.8 billion yen will be invested to increase the production of silicon carbide (SiC) wafers and lithium-ion battery components.

In addition to semiconductor-related businesses, automotive, which is positioned as a growth business, will receive 10 billion yen to increase production capacity for resin parts, and regenerative medicine-related products will receive 8.2 billion yen. The remaining approximately 20 billion yen of capital investment will be used to repay debts.

The company has set a target of increasing sales 60% from December 2008 to 1.6 trillion yen and EBITDA (earnings before interest, taxes and amortization) 6.4 times to 320 billion yen by the fiscal year ending December 2013.

Since 2009, the company has announced the sale of aluminum cans, food packaging paper, printed circuit boards, lead-acid batteries, and paved the way for the listing of its subsidiary Shoko Co., Ltd.