Komatsu Ltd., signs a letter of intent to sell its polysilicon business (ASiMI)

Komatsu Ltd. ("Komatsu") (CEO: Masahiro Sakane) signed a letter of intent to sell 75% of the ownership interest in its U.S. subsidiary, Advanced Silicon Materials LLC ("ASiMI"), to Renewable Energy Corporation AS ("REC"), a Norwegian company. The execution of definitive agreements is expected to take place in April 2005 and the sale is anticipated to close in the first half of fiscal 2005, subject to the completion of negotiations and the satisfaction of certain conditions, including regulatory requirements.

Komatsu decided it is appropriate to sell 75% of its equity ownership in ASiMI in light of the increase in ASiMI's value resulting from current very strong demand for silane gas and market conditions for polycrystalline silicon. The profit related to this transaction will be included in Komatsu's consolidated financial results for the fiscal year ending March 31, 2006.

ASiMI manufactures and sells polycrystalline silicon principally for semiconductor applications and silane gas principally for semiconductor and LCD applications. ASiMI's facilities are located in Butte, Montana. In September 2002, ASiMI contributed its plant in Moses Lake, Washington to establish Solar Grade Silicon LLC ("SGS"), a joint venture with a subsidiary of REC. SGS manufactures and sells polycrystalline silicon exclusively for solar applications. ASiMI currently owns 30% of SGS and the scope of the sale includes such stake.

REC has announced that post acquisition, while continuing operation of ASiMI's silane gas business, it plans to shift ASiMI's focus from polycrystalline silicon for electronic applications to polycrystalline silicon for solar applications. Under long term supply agreements, ASiMI will continue to supply polycrystalline silicon for semiconductor applications to Komatsu Electronic Metals Co., Ltd., a Komatsu subsidiary which manufactures silicon wafers, and its subsidiary in Taiwan, Formosa Komatsu Silicon Corporation. ASiMI will continue to supply polycrystalline silicon for semiconductor applications to all of its present customers in accordance with existing agreements.

Company name: Advanced Silicon Materials LLC
Established: 1990
Head Office: Butte, MT, U.S.A.
President & CEO: Michael W. Kerschen
Main Businesses: Manufacture and sale of polycrystalline silicon principally for semiconductor applications and sale of silane gas principally for the semiconductor and LCD markets.
Shareholders: Komatsu America Corp. * 100%
Manufacturing Base: Butte, MT, U.S.A.
Number of Employees: Approx. 400 (December 31, 2004)
Annual Sales: Approx. 130 million Dollars (Fiscal Year Ending March 2005)

* Komatsu America Corp. is a wholly owned subsidiary of Komatsu Ltd., and is the regional headquarters in U.S.A.

Company name: Solar Grade Silicon LLC
Established: 2002
Head Office: Moses Lake, WA, U.S.A.
President & COO: Tor Hartmann
Main Businesses: Manufacture and sale of polycrystalline silicon for solar applications
Manufacturing Site: Moses Lake, WA, U.S.A.
Number of Employees: Approx. 173 (December 31, 2004)
Annual Sales: Approx. 79 million Dollars (Fiscal Year Ending December 2004)

Company name: Renewable Energy Corporation
Established: 2000
Head Office: Oslo, Norway
President & CEO: Dr. Alf Bjorseth
Main Businesses: REC is a Norwegian based holding company active in entire value chain of solar energy from the manufacture of solar grade polycrystalline silicon feedstock to the sale of photovoltaic systems.
Manufacturing Site: Norway, Sweden, U.S.A.
Number of Employees: Approx. 650 (December 31, 2004)
Annual Sales: Approx. 230 million Dollars (Fiscal Year Ending December 2004)