AZ Electronic Materials Completes Major Plant Expansion in Hsinchu, Taiwan

Taipei, Taiwan – AZ Electronic Materials, the independent specialty chemicals company, is today holding an opening ceremony to celebrate the completion of a major expansion of its photoresist facility in Hsinchu, Taiwan. AZ has invested of NTD 310 million (€7.59 million) to expand production and employment at the Taiwanese plant.

AZ Electronic Materials is the world’s leading manufacturer and developer of electronic materials for the flat panel display (FPD) and integrated circuit (IC) industries. AZ has research and development and manufacturing sites in Japan, Korea, Germany, France and the United States as well as Taiwan. The company is majority owned by private equity firms The Carlyle Group and Vestar Capital Partners.

AZ has a very strong market position in the Taiwanese FPD market and the facility at Hsinchu has been expanded in response to continued high demand for photoresist products. To date, AZ has produced its photoresists by using bulk production in Japan, and then customized the products in the Hsinchu facility in Taiwan. The new expanded plant will enable AZ to produce semi-finished products in Taiwan, without bulk production in Japan. This will provide both a secure supply chain and time and cost efficiencies for AZ’s customers.

The Hsinchu facility has been extended and a refrigerated warehouse constructed, all fully equipped with safety precautions and features. Processing and quality control equipment and tools have been installed, and storage capacity increased. Construction of the extension started in January 2007and the plant will be fully operational in Q3 2008. AZ Electronic Materials currently employs 110 people in Taiwan, and it is expected that once fully operational employment will increase by 30%.

Thomas von Krannichfeldt, CEO of AZ Electronic Materials, comments, “We are thrilled that the Hsinchu plant expansion has gone to plan. We place customer service and quality of product as our highest priorities, and bringing production closer to our customer base in Taiwan will mean they can enjoy even better service from AZ. AZ remains the only major photoresist supplier to the FPD market that manufactures in Taiwan and we are pleased to be a growing employer in the country.”

Robert Easton, Managing Director, The Carlyle Group, adds, “In September 2006, AZ committed to investing €50 million over 18 months in development and expansion programmes to increase production capacity. As well as the investment in Hsinchu, AZ is investing €13 million in Japan, to expand its manufacturing capacity for polysilazane (PHPS), and €7 million in the IC business in the US, including an expansion of the Klebosol plant in Martin, South Carolina. This major investment programme will ensure we can keep up with growing demand for AZ’s superior product range and ensure we stay ahead of the curve in product R&D.”

Robert Rosner, President of Vestar Capital Partners Europe, noted that, "Taiwan is now a key market in both Flat Panel Displays and Integrated Circuits, and AZ is committed to supporting its customers through additional investments in the coming years. Hsinchu is another step towards our increased production capacity in Asia."

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About AZ Electronic Materials
AZ Electronic Materials is an independent specialty chemicals business with plants in Taiwan, Korea, China, Japan, France, Germany and the US, and provides specialty chemicals for the flat panel displays, integrated circuits and devices, and photolithographic printing industries. The international business is headquartered is in Luxembourg, and is owned by the global private equity firm The Carlyle Group, Vestar Capital Partners and AZ Electronic Materials management.

About Vestar Capital Partners
Vestar Capital Partners is a leading international private equity firm specializing in management buyouts and growth capital investments. The firm's investment strategy is targeted towards companies in the U.S., Europe, and Japan with valuations in the $100 million to $4 billion range. Since the firm's founding in 1988, the Vestar funds have completed over 60 investments in the U.S. and Europe in companies with a total value of over $20 billion. These companies have varied in size and geography and span a broad range of industries. The firm's strategy is to invest behind incumbent management teams, family owners or corporations in a creative, flexible and entrepreneurial way with the overriding goal to build long-term franchise value. Vestar currently manages funds with committed capital totaling approximately $7 billion and has offices or affiliates operating in New York, Denver, Boston, Paris, Milan, Munich and Tokyo. More information about Vestar is available at www.vestarcapital.com.

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