Our company held a completion ceremony on October 2 for the new factory being constructed at our facility in Tohoku City, Miyagi Prefecture, aimed at mass production of silicon nitride insulating heat dissipation substrates. In pursuit of a low-carbon and decarbonized society, the power electronics sector is actively advancing the development and commercialization of power semiconductors, power semiconductor-equipped circuits, insulating heat dissipation substrates, and power modules, which are essential for energy-saving devices in HV/electric vehicles, high-speed rail, and industrial equipment. For improving power module performance, insulating heat dissipation substrates that can efficiently dissipate heat generated by power semiconductors and electronic devices are crucial. Our silicon nitride insulating heat dissipation substrates possess high thermal conductivity (80-90W), excellent mechanical properties, and insulation, earning high praise from automotive manufacturers and circuit board manufacturers as insulating heat dissipation substrates for power semiconductors used in hybrid and electric vehicles. This led us to decide on the investment for a mass production factory in November 2018, and it has now been completed. In addition to our plan to gradually increase production in line with market expansion, we also intend to realize the commercialization of insulating heat dissipation substrates with thermal conductivity increased to approximately 1.5 times the current level.

Our company has resolved at the board of directors meeting held on May 18, 2020, to conduct an absorption merger with our company as the surviving entity and our 100% subsidiary, Meito Giken Co., Ltd., as the dissolving entity, effective July 1, 2020. We hereby inform you as follows. 1. Purpose of the Merger Through this merger, we aim to further strengthen our integrated production system from raw material formulation to precision processing, and to provide attractive ceramic products and expand our business in the fields of engineering ceramics, electronic ceramics, metal ceramic composite materials, and precision processing of various ceramic components. 2. Summary of the Merger (1) Schedule: Date of board resolution and merger agreement signing: May 18, 2020; Merger date (effective date): July 1, 2020 (planned) (2) Method of Merger: This merger will be conducted as an absorption merger with our company as the surviving entity and Meito Giken Co., Ltd. as the dissolving entity.

Nihon Fine Ceramics Co., Ltd. (Headquarters: Sendai City) has recently established a new office in Tohoku City, Miyagi Prefecture, and completed the construction of a new factory. Since our founding in 1984, we have made fine ceramics, a new material, the cornerstone of our business, advancing research and development of ceramic products and continuously challenging ourselves to develop products that meet market demands, thereby aiming for continuous business expansion. As a result, we are currently at a significant turning point aiming for new growth accompanied by the expansion of our business. Considering the steady growth trends in the fine ceramics market, we have determined that it is necessary to enhance the competitiveness of our existing factories and to launch new businesses to respond to new demands in order to continue our growth. Therefore, we have established a new office in Tohoku City, Miyagi Prefecture, and constructed a new factory aimed at commencing operations in the first half of fiscal 2018, so that we can supply high-quality products to our customers even more efficiently. As a member of the JGC Group, we will strive for continuous growth to fulfill our mission: "We will gather our technologies and expertise on the world stage to create a rich future for people and the planet."