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Showa Denko And Infineon Technologies Conclude Supply Contract And Development Agreement

TOKYO, May 6, 2021 - (JCN Newswire) - Showa Denko K.K. (SDK; TSE:4004) has concluded a two-year contract including optional extension clauses with Infineon Technologies AG (Infineon), a German semiconductor manufacturer providing semiconductor solutions for automotive and industrial use worldwide, to sell SiC materials for power semiconductors and cooperatively develop SiC materials technology.

SDK expects the contract will enable Infineon to apply SDK SiC materials to various power semiconductor products and the two companies to accelerate improvement in quality of products by bringing together the two companies' knowledge.

Due to the homogeneity in properties[1] and low density of surface defects[2], SDK SiC epi-wafers materials, which were launched into the market in 2009, have been adopted by electronic device manufacturers as parts of various devices including power supply for servers of cloud computing systems, inverters for railcars and solar power generation systems, and converters installed in quick charging stands for EVs.

As the largest independent manufacturer of SiC epi-wafers (estimated by SDK), and under a motto of "Best in Class," the Showa Denko Group will continue coping with rapid expansion of the market for SiC epitaxial wafers and providing the market with high-performance and highly-reliable products, thereby contributing to the proliferation of SiC power semiconductors.

For reference, we attach Infineon's press release as follows.

Infineon increases supply security for silicon carbide by expanding the supplier base

Munich, Germany - 6 May 2021 - Infineon Technologies AG (FSE: IFX / OTCQX: IFNNY) has concluded a supply contract with the Japanese wafer manufacturer Showa Denko K.K. for an extensive range of silicon carbide material (SiC) including epitaxy. The German semiconductor manufacturer has thus secured more base material for the growing demand for SiC-based products. SiC enables highly efficient and robust power semiconductors that are used in particular in the fields of photovoltaic, industrial power supply, and charging infrastructure for electric vehicles.

"Our broad and fast growing portfolio demonstrates Infineon's leading role in supporting and shaping the market for SiC-based semiconductors which is expected to grow 30 to 40% annually over the next five years," says Peter Wawer, President of the Industrial 2 Power Control Division at Infineon.* "The expansion of our supplier base with Showa Denko for wafers in this growth market marks an important step in our multisourcing strategy. It will support us to reliably meet the growing demand mid to long term. Furthermore, we plan to collaborate with Showa Denko on the strategic development of the material to improve the quality while cutting costs at the same time."

"We are proud to be able to provide Infineon with Best-in-Class SiC material and our cutting-edge epitaxy technology," says Jiro Ishikawa, Senior Managing Corporate Officer from Showa Denko K.K. "Our aim is to continuously improve our SiC material and develop the next technology. We value Infineon as an excellent partner in this regard."

The contract between Infineon and Showa Denko K.K. has a two-year term with an extension option. Infineon has the industry's largest portfolio of SiC semiconductors for industrial applications.

*Source: Yole, "Compound Semiconductor Market Monitor-Module 1 Q1 2021", April 2021

[1] "Homogeneity in properties" means that homogeneity in doping of nitrogen which determines physical property of wafer has been achieved. SiC power semiconductor is produced from SiC doped with nitrogen. SiC power semiconductor for high voltage requires homogeneous doping with small amount of nitrogen.
[2] "Low density of surface defects" means that the wafer has extremely small numbers of surface defects per square centimeter of wafer surface. If a surface defect exists, electricity flows through that surface defect, and the chip cannot be used as power device. On the other hand, SiC power device for large current requires large SiC chip. Therefore, low density of surface defects is necessary for achievement of high yields in production of power devices. SDK's second generation high-grade SiC epi-wafer (HGE-2G) has achieved 1/2 or less density of surface defects compared to that of the first generation product (HGE).

About Infineon

Infineon Technologies AG is a world leader in semiconductor solutions that make life easier, safer and greener. Microelectronics from Infineon are the key to a better future. In the 2020 fiscal year (ending September 30), the company reported revenue of more than 8.5 billion euros with a workforce of 46,700 people worldwide. Following the acquisition of the US company Cypress Semiconductor Corporation in April 2020, Infineon is now a global top 10 semiconductor company.

Infineon is listed on the Frankfurt Stock Exchange (ticker symbol: IFX) and in the USA on the over-the-counter market OTCQX International Premier (ticker symbol: IFNNY). Further information is available at www.infineon.com

This press release is available online at www.infineon.com/press
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About Showa Denko K.K.

Showa Denko K.K. (SDK; TSE: 4004, ADR: SHWDY) is a major manufacturer of chemical products serving heavy industry to computers and electronics. Our Petrochemicals segment provides cracker products such as ethylene and propylene; Chemicals provides high-performance gases and chemicals to semicon and other industries; Inorganics provides ceramic products: alumina, abrasives, refractory/graphite electrodes and fine carbons. Aluminum provides aluminum materials and high-value-added fabricated aluminum; Electronics provides HD media, compound semiconductors such as ultra high-bright LEDs and rare earth magnetic alloys; Advanced Battery Materials (ABM) provides lithium-ion battery components. Please visit us at www.sdk.co.jp/english/.

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