“Taiyo Nippon Sanso decided to withdraw from Evonik Degussa Monosilane Japan, a joint venture company for producing monosilane, as of September 30. Along with this, an extraordinary loss of around 23.3 billion yen will be declared in the second quarter closing.

In 2009 Taiyo Nippon Sanso and Evonik Degussa Japan reached an agreement to set up a joint venture (Taiyo Nippon Sanso 75%, Evonik Degussa Japan 25%) to handle purification, filling and quality management of monosilane gas produced by Evonik Monosilan Japan. The output has been marketed exclusively by the Taiyo Nippon Sanso Group.

However, as the global recession has continued since the financial crisis began in the US in 2008, the demand in the electronics sector has also been sluggish. In addition, production of thin film silicon PV cells and LCDs which had been expected to expand has shrunk due to concern about the electric power shortage and the appreciation of the yen caused by the Great Eastern Japan Earthquake. Along with these, production and sales for monosilane gas also decreased below the amount initially expected.

Due to the withdrawal, the penalty for the early termination of the agreement of joint activities of around 19.8 billion yen and the losses due to liquidation of the joint venture and other related costs of around 3.5 billion yen which amounted to a total 23.3 billion yen will be declared in the second quarter closing of this year.

Moreover, in response to the financial impact from the extraordinary losses, the Company will reduce the executive compensation for those members of the board of directors who were newly assigned as of October 1.”