Announcement Regarding Establishment of a New Company and Capital Investment (New Factory Construction) in the Recycled Wafer Business, and Transfer of Subsidiary to Equity-Method Affiliate Due to Investment in Recycled Wafer Business Subsidiary (CRSM)

Background and Objectives of Business Expansion

With the growth of the global semiconductor industry, the importance of recycled wafers is increasing. CRSM, the leading recycled wafer company in China, is experiencing demand exceeding production capacity. Through strategic partnerships with Hefei Construction and Investment Group and Hefei Guotou, the company aims to expand production capacity. A new company will be established in Hefei City, Anhui Province, where a new factory (Hefei Factory) will be constructed and capacity at the existing Tongling Factory will be enhanced, aiming to become a leading company in recycled wafers.

Overview of Capital Investment and Capital Policy

Total capital investment amounts to 2 billion Chinese yuan (approximately 46.6 billion yen), with 1.6 billion yuan (approximately 37.3 billion yen) allocated to new factory construction and 400 million yuan (approximately 9.3 billion yen) for capacity enhancement at the Tongling Factory. Construction of the new factory is scheduled to start in May 2026 and commence operations in December 2027. CRSM will raise 1.4 billion Chinese yuan (approximately 32.6 billion yen) through a third-party allotment capital increase and will transition from a consolidated subsidiary to an equity-method affiliate. Hefei Guotou is expected to become the largest shareholder.

Future Outlook

The transfer of CRSM to an equity-method affiliate is expected to have minimal impact on the company's profit and loss. This fundraising is part of business growth, profitability improvement under the medium-term management plan, and business selection and focus. Any additional disclosures will be promptly announced.