Acquisition of IS Electrode Materials Co., Ltd. as a Wholly-owned Subsidiary

Idemitsu Kosan Co., Ltd. (headquarters: Chiyoda-ku, Tokyo; President: Akihiko Tembo; hereinafter Idemitsu) is pleased to announce that it has acquired the 49%-share of IS Electrode Materials Co., Ltd. (headquarters: Chiyoda-ku, Tokyo; President: Kazuo Murakata: hereinafter ISEM) from Sumitomo Metal Mining Co., Ltd. (headquarters: Minato-ku, Tokyo; President: Nobumasa Kemori; hereinafter SMM) effective October 1, thus making ISEM a wholly-owned subsidiary of Idemitsu. Manufacturing consignment relationship with SMM concerning IZO® will continue.

Since its establishment in April 2005, ISEM has been manufacturing and selling transparent electrode material IZO®, and with the demand for LCD televisions expanding and competition intensifying, the need for further strengthening of cost competitiveness has increased. In order to adapt to such business environment, Idemitsu has made ISEM its wholly-owned subsidiary and will proceed to reorganize the supply system.

IZO® is a transparent electrode material developed by Idemitsu, and is used in flat panel displays such as LCD, OLED display, etc. Due to its large processing advantages especially in the production lines of large motherglass substrates for big-screen LCD televisions compared with the competing product ITO, the IZO is used mainly in the production lines above the 5th generation or higher. Further expansion in demand is forecasted with the expected launch of production lines such as the 8G and 10G.