MIRA INFORM REPORT

Report Date :

01.03.2007

IDENTIFICATION DETAILS

Name :	SUMCO TECHXIV CORPORATION
Registered Office :	1324-2 Masugaharamachi Omura City Nagasaki-Pref 856-8555
Country :	Japan
Financials (as on) :	31.03.2006
Date of Incorporation :	Apr 1960
Legal Form :	Limited Company (Kabushiki Kaisha)
Line of Business :	Manufacturing of semiconductor silicon wafers

RATING & COMMENTS

MIRA’s Rating :

Ba

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	Yen 1602.9 millions
Status :	Good
Payment Behaviour :	Usually correct
Litigation :	Clear

name

SUMCO TECHXIV CORPORATION

REGD NAME

Sumco Techxiv KK

MAIN OFFICE

1324-2 Masugaharamachi Omura City Nagasaki-Pref 856-8555 JAPAN

Tel : 0957-52-0111

Fax : 0957-52-3178

URL : http://www.sumcotechxiv.com/

E-Mail address: info@sumcotechxiv.com

ACTIVITIES

Mfg of semiconductor silicon wafers

BRANCHES

Tokyo, Osaka, Fukuoka

OVERSEAS

Singapore, Shanghai

(Subsidiaries): Formosa Sumco Technology Corp (Taipei, Hsinchu, Mailiao); Sumco Techxiv Europe NV (Belgium)

FACTORY(IES)

At the caption address, Miyazaki

CHIEF EXEC

TAKASHI ABE, PRES & CEO

Yen Amount: In million Yen, unless otherwise stated

SUMMARY

FINANCES FAIR A/SALES Yen 86,667 M

PAYMENTS REGULAR CAPITAL Yen 11,636 M

TREND STEADY WORTH Yen 30,771 M

STARTED 1960 EMPLOYES 2,758

COMMENT

MFR OF SEMICONDUCTOR SILICON WAFERS, AFFILITED TO SUMCO CORP. FINANCIAL SITUATION CONSIDERED FAIR AND GOOD FOR CREDIT ENGAGEMENTS: R800,000 / 60 DAYS.

MAX CREDIT LIMIT: YEN 1,602.9 MILLION, 30 DAYS NORMAL TERSM..

Forecast (or estimated) figures for 31/03/2007 fiscal term

HIGHLIGHTS

This is major mfr of semiconductor wafers holding roughly 10% share on the global market. Originally established as Komatsu Electronics Metals Co Ltd, a JV between Komatsu Ltd and Ishizuka Institute Ltd for production of high-purity polycrystalline silicon. Became Sumco group member in Oct 2006 by TOB. By this arrangement Komatsu Ltd stock decreased to 10% from the original 61.9%. Sumco group plans to increase overall production capacity for 300mm wafers by 130% from current levels to 1.4 million units a month by 2009. For this purpose, the Sumco plans to invest in excess of Yen 200,000 million to boost production capacity at three plants: Saga, Nagasaki and Taiwan. Con subsidiary in Europe is also engaged in silicon wafer production. Renamed as captioned on 01/Jan/2007.

FINANCIAL INFORMTION

The sales volume for Mar/2006 fiscal term amounted to Yen 86,667 million, a 15.7% up from Yen 74,908 million in the previous term. Sales boosted by robust demand for 300mm wafers which grew stronger than projection. Weaker Yen also helped. The recurring profit was posted at Yen 9,945 million and the net profit at Yen 5,598 million, respectively, compared with Yen 5,964 million recurring profit and Yen 3,194 million net profit, respectively, a year ago.

For the current term ending Mar 2007 the recurring profit was projected at Yen 15,200 million and the net profit at Yen 9,000 million, on a 16.5% rise in turnover, to Yen 101,000 million.

Note: The firm announced the change of accounting term to Feb/Jan from Apr/Mar from this term. Final results are yet to be produced. The Sumco group sees profits will surge 40% for Jan/2007 fiscal term as wafer output rises.　Aided by increased output of memory chips, demand for 300mm wafers is continuing to grow. Demand for 200mm wafers is expected to remain strong.

The financial situation is considered FAIR and good for ORDINARY business engagements. Max credit limit is estimated at Yen 1,602.9 million, on 30 days normal terms. The proposed amount is considered well within the firm’s financial capabilities.

REGISTRATION

Date Registered : Apr 1960

Legal Status : Limited Company (Kabushiki Kaisha)

Issued : 30,200 K shares

Sum : Yen 11,636 million

Major shareholders (%): Sumco Corp*(51.05), Komatsu Ltd (10.99), Master Trust Bank of Japan T (2.0), Chase

(London) SL Omnibus Acct (1.5), Employees’ S/Holding Assn (1.5), Millennium (1.4), JP

Morgan Chase Bank (1.4), Credit Suisse (Lux) Depositary B (1.1), Goldman Sachs

International (0.9), Co-op Company’s S/Holding Assn (0.9), SMBC (0.9); foreign owners

(12.7)

No. of shareholders : 6,259

*.. Major silicon wafer mfr, having second-largest share of global market, founded 1999, listed Tokyo S/E, capital Yen 82,173 million, turnover Yen 220,526 million, recurring profit Yen 36,554 million, net profit Yen 20,486 million, total assets Yen 351,934 million, net worth Yen 161,680 million, employees 5,554, pres Kenjiro Shigematsu

Listed on the S/Exchange (s) of: Tokyo (Second Section)

Managements : Takashi Abe, pres & CEO; Yutaka Hirose, v pres; Mitsuo Yokokawa, s/mgn dir; Tadashi

Watabe, s/mgn dir; Tetsuo Ikeda, s/mgn dir; Toshihisa Asano, s/mgn dir, Hideyuki

Nagai, mgn dir; Yukio Saitoh, mgn dir

Nothing detrimental is known as to the commercial morality of executives.

Related companies

Formosa Sumco Technology Corp, Sumco Techxiv Europe, other (Tot 3 as of Mar/06)

OPERATION

Activities: Manufactures semiconductor silicon wafers (98%): epitaxial wafers, annealed wafers, polished wafers, diffused wafers, etched wafers, lapped wafers, sliced wafers; Others (2%).

Overseas sales ratios 55%.

Clients

[Mfrs, wholesalers] Toshiba Corp, NEC, other.

No. of accounts: 800

Domestic areas of activities: Nationwide

Suppliers

[Mfrs, wholesalers] Formosa Sumco Technology Corp, Tokuyama Corp, other.

Payment record: Regular

Location

Business area in Omura City, Nagasaki-Pref. Office premises at the caption address are owned and maintained satisfactorily.

Bank References

Mizuho Corporate Bank (H/O)

SMBC (Tokyo)

Relations: Satisfactory

FINANCES (Consolidated in million yen)
		Terms Ending:		31/03/2006	31/03/2005
INCOME STATEMENT
	Annual Sales			86,667	74,908
	Cost of Sales			67,685	59,582
	GROSS PROFIT			18,981	15,325
	Selling & Adm Costs			10,011	9,292
	OPERATING PROFIT			8,970	6,032
	Non-Operating P/L			975	-68
	RECURRING PROFIT			9,945	5,964
	NET PROFIT			5,598	3,194
BALANCE SHEET
	Cash			626	1,820
	Receivables			18,835	15,344
	Inventory			16,146	11,324
	Securities, Marketable			226
	Other Current Assets			3,842	4,800
	TOTAL CURRENT ASSETS			39,675	33,288
	Property & Equipment			61,220	54,489
	Intangibles			880	1,064
	Investments, Other Fixed Assets			6,507	6,320
	TOTAL ASSETS			108,282	95,161
	Payables			12,839	9,666
	Short-Term Bank Loans			23,162	30,795
	Other Current Liabs			10,333	9,062
	TOTAL CURRENT LIABS			46,334	49,523
	Debentures
	Long-Term Bank Loans			18,550	13,300
	Reserve for Retirement Allw			4,713	4,200
	Other Debts			82	70
	TOTAL LIABILITIES			69,679	67,093
	MINORITY INTERESTS			7,831	2,933
	Common stock			11,636	11,636
	Additional paid-in capital			12,824	12,824
	Retained earnings			6,140	847
	Evaluation p/l on investments/securities			120	93
	Others			51	(266)
	Treasury stock, at cost			0	0
	TOTAL S/HOLDERS` EQUITY			30,771	25,134
	TOTAL EQUITIES			108,282	95,161
CONSOLIDATED CASH FLOWS
			Terms ending:	31/03/2006	31/03/2005
	Cash Flows from Operating Activities			18,532	17,095
	Cash Flows from Investment Activities			-18,336	-11,197
	Cash Flows from Financing Activities			-1,126	-4,829
	Cash, Bank Deposits at the Term End			853	1,820
ANALYTICAL RATIOS Terms ending:				31/03/2006	31/03/2005
		Net Worth (S/Holders' Equity)		30,771	25,134
		Current Ratio (%)		85.63	67.22
		Net Worth Ratio (%)		28.42	26.41
		Recurring Profit Ratio (%)		11.47	7.96
		Net Profit Ratio (%)		6.46	4.26
		Return On Equity (%)		18.19	12.71

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions