Ferrotec : Notice of Capital Investment (Construction of a New Factory) in Malaysia by Subsidiary that Manufactures Insulated Heat Dissipating Substrates for Power Semiconductors picture_as

News Release: Ferrotec Holdings Corporation (6890 TSE Standard)

July 19, 2023

Notice of Capital Investment (Construction of a New Factory) in Malaysia by Subsidiary that

Manufactures Insulated Heat Dissipating Substrates for Power Semiconductors

Ferrotec Holdings Corporation (Representative Director: He Xian Han; hereinafter "the Company") announces that, at the meeting of Board of Directors held today, we have resolved to conduct capital investment (construction of a new factory) in Malaysia by Jiangsu Ferrotec Semiconductor Technology Co., Ltd. (hereinafter "FLH"), a subsidiary that manufactures insulated heat dissipating substrates for power semiconductors. Details are as follows.

1. Background for the investment, etc.

The Company's power semiconductor business has been expanding rapidly, thanks to the growth of the electric vehicle industry and the new energy industry, including solar power generation, and the global trend of electrification. In addition, the Company has fostered long-term relationships for strategic cooperation with leading global client companies, and these clients, too, expect the long-term growth of our business.

Under these circumstances, the Company has increased our production sites steadily in Shanghai, Dongtai, and Sichuan in China, to meet the needs from clients, and this time, we have decided to establish a new production site in southern Malaysia, considering the recent changes in the business environment and the necessity to attend to major clients. By building this new factory, we will meet the demand in the rapidly growing market of power semiconductors, and concentrate on business expansion.

For establishing the above-mentioned new production site, we aim to complete it speedily and curtail the investment amount by buying an existing factory and renovating it, including its interior design.

In addition, we plan to establish a local subsidiary that will directly manage and operate the above-mentioned production site. For the progress of timely disclosure, please refer to " Appendix I: List of releases on FLH."

2. Outline of the capital investment

	(1)		Investment amount	694,600,000 yuan (approx. 13.7 billion yen)
					1 Chinese yuan = 19.71 yen
	(2)		Construction site for the	Johor Bahru, Johor, Southern Malaysia
			new factory
	(3)		Details of investment	Factory building, etc.: 265,000,000 yuan (approx. 5.2 billion yen)
					(1 Chinese yuan = 19.71 yen）
					(Total floor area of the building: Approx. 34,000m2)
					Machinery and equipment: 309,000,000 yuan (approx. 6.1 billion yen)
					Other: 120,000,000 (approx. 2.4 billion yen)
	(4)		Production capacity	DCB substrate: 300,000/month, AMB substrate: 200,000/month
	(5)		Schedule	Design of building renovation: July 2023
					Start of building renovation: September 2023
					Start of installation of machinery and equipment: May 2024
	(6)		Scheduled date of start of	September 2024
			operation
3. Overview of the subsidiary as of March 31, 2023
	(1)		Name		Jiangsu Ferrotec Semiconductor Technology Co., Ltd. (FLH)
	(2)		Address		18 Hongda Road, Chengdong new district, Dongtai City, Jiangsu Province, China
	(3)		Title and name of		He Xian Han, Representative Director
			Representative
	(4)		Contents of business		Manufacture and sale of power semiconductor substrates
	(5)		Capital		417,074,000 yuan (approx. 8.2 billion yen)
					(1 Chinese yuan = 19.71 yen)
	(6)		Date of establishment		March 16, 2018
	(7)		Major shareholder and		Shareholder		Shareholding
		shareholding ratio				ratio

News Release: Ferrotec Holdings Corporation	(6890 TSE Standard)
			Shanghai Shenhe Investment Co., Ltd. (abbr.: FTS)		55.1%
			Capital relationship	FLH is a subsidiary 55.1% of whose voting rights are held
				by FTS, a consolidated subsidiary of the Company.
		Relationship between FLH
	(8)	Personnel relationship	The representative director and	president of the
	and the company		Company concurrently serves as director of the
				subsidiary.
			Business relationship	Nothing is applicable.

4. Future outlook

The impact on the business performance of the Company for the current fiscal year through this matter is expected to be minor. However, we will promptly disclose relevant items as soon as they are confirmed.

News Release: Ferrotec Holdings Corporation	(6890 TSE Standard)
Appendix I: List of releases on FLH
	Release date		Title
	Dec. 16, 2022		(Change of a Disclosed Item) Notice of the Fifth Issuance of New Shares through Third-Party Allotment by Subsidiary that Manufactures
		Insulated Heat Dissipating Substrates for Power Semiconductors
	Nov. 15, 2022		Notice of the Fifth Issuance of New Shares through Third-Party Allotment by Subsidiary that Manufactures Insulated Heat Dissipating
		Substrates for Power Semiconductors
	Jul. 20, 2022		Notice of Capital Investment (Construction of a New Factory) by Subsidiary that Manufactures Insulated Heat Dissipating Substrates for
		Power Semiconductors
	May 27, 2022		(Correction and Change of a Disclosed Item) Notice of Fourth Issuance of New Shares through Third-Party Allotment by Subsidiary that
		Manufactures Insulated Heat Dissipating Substrates for Power Semiconductors
	Mar. 17, 2022		(Correction of a Disclosed Item) Notice of Fourth Issuance of New Shares through Third-Party Allotment by Subsidiary that Manufactures
		Insulated Heat Dissipating Substrates for Power Semiconductors
	Mar. 16, 2022		Notice of Fourth Issuance of New Shares through Third-Party Allotment by Subsidiary that Manufactures Insulated Heat Dissipating
		Substrates for Power Semiconductors
	Mar. 7, 2022		Notice of the Conclusion of an Investment Contract by a Subsidiary that Manufactures Insulated Heat Dissipating Substrates for Power
		Semiconductors
	Feb. 25, 2022		Notice of the Conclusion of an Advisory Contract for Listing Between a Subsidiary that Manufactures Insulated Heat Dissipating
		Substrates for Power Semiconductors and Huatai United Securities and the Registration by the China Securities Regulatory Commission
	Aug. 6, 2021		Notice of Issuance of New Shares through Third-Party Allotment by Subsidiary that Manufactures Insulated Heat Dissipating Substrates
		for Power Semiconductors
	Apr. 28, 2021		(Change of a Disclosed Item) Notice of the Establishment of a Research	Institute in the Subsidiary that Manufactures Power
		Semiconductor Substrate
	Apr. 15, 2021		Notice of the Establishment of a Research Institute in the Subsidiary that Manufactures Power Semiconductor Substrate
	Mar. 19, 2021		(Addition/Correction of a Disclosed Item) Notice of the (Second) Issuance of New Shares through Third-Party Allotment by the Subsidiary
		that Manufactures Power Semiconductor Substrate
	Feb. 10, 2021		Notice of the (Second) Issuance of New Shares through Third-Party Allotment by the Subsidiary that Manufactures Power Semiconductor
		Substrate
	Nov. 17, 2020		Notice of the Issuance of New Shares through Third-Party Allotment by the Subsidiary that Manufactures Power Semiconductor Substrate

Appendix II: Type of power semiconductors and their pressure resistance/application

Main market fields for DCB/AMB: Industrial machinery, motor vehicles, electrical railway, and renewable energy