KOMATSU : Announcement Concerning the Change of Subsidiary Company

As announced in the September 12, 2006 press release, entitled "Announcement Concerning Acceptance of Tender Offer", Komatsu applied for the tender offer by SUMCO Corporation (President: Kenjiro Shigematsu; hereinafter referred to as "SUMCO") for Komatsu Electronic Metals Co., Ltd. (President: Takashi Abe; hereinafter referred to as "KEM"). Since the TOB by SUMCO was completed on October 11, KEM will no longer be a subsidiary company of Komatsu Ltd. after the anticipated date of transfer, which is October 18, 2006. Thus Komatsu hereby announces the following.

[Profile of the company which will no longer be a subsidiary of Komatsu Ltd.]

Corporate name	Komatsu Electronic Metals Co., Ltd.
Date of establishment	April 18, 1960
Head office	1324-2, Masuragahara, Omura, Nagasaki
Representative Director	Takashi Abe
Business activities	Manufacture and sale of silicon wafers
End of fiscal year	March 31
Major shareholder	Komatsu Ltd. (61.93%) (as of March 31, 2006)
Manufacturing locations	Nagasaki, Miyazaki, Taiwan (Formosa Komatsu Silicon Corp.)
Number of employees	2,758 (consolidated)
Net sales	JPY86.6 billion (for the fiscal year ended March 31, 2006)

[Profile of the purchaser of KEM's shares]

Corporate name	SUMCO Corporation
Date of establishment	July 30, 1999
Head office	1-2-1, Shibaura, Minato-ku, Tokyo
Representative Director	Kenjiro Shigematsu
Business activities	Manufacture and sale of silicon wafers
End of fiscal year	January 31
Major shareholders	Sumitomo Metal Industries, Ltd. (29.95%), Mitsubishi Materials Corporation (29.95%)
Manufacturing locations	Saga, Imari, Yonezawa and other locations
Number of employees	5,554 (consolidated)
Net sales	JPY220.5 billion (for the fiscal year ended January 31, 2006) (consolidated)

[Details of the transfer of KEM's shares]

Number of shares held by Komatsu Ltd. before the transfer	18,702,900 (61.93% of total issued shares)
Number of shares transferred	15,402,000 (Total Price : 36,964 millions of yen)
Number of shares held by Komatsu Ltd. after the transfer	3,300,900 (10.93% of total issued shares)

[Anticipated date of transfer]

October 18, 2006 (first settlement day of TOB by SUMCO)

[Future Outlook]

The projections for Komatsu Ltd. for the fiscal year ending March 31, 2007 after reflecting the KEM share transfer will be as follows. No change has been made from the projection announced on July 27, 2006 which referenced information that explained the projection giving effect to the completion of the tender offer by SUMCO.

Note: As the Tender Offer has been completed, the gain on sale of KEM and the operation results of KEM are presented as a separate line item, gNet income from discontinued operation,h in the consolidated statements of income in accordance with Statement of Financial Accounting Standards No.144.

"Operating profit" in the consolidated financial result is calculated as the total of all business segments, which is calculated as net sales minus cost of sales, SG&A expense, in accordance with Japanese accounting practice.

<< Cautionary Statement >>
Future outlook has been prepared and judged to be reasonable by the management of Komatsu by using information currently available. Actual result may differ materially from the future outlook due to the change of various factors. These factors include, but are not limited to, unanticipated changes in demand for the Company's principal products owing to changes in the economic conditions in principal markets, changes in exchange rates, and the impact of regulatory changes and accounting principles and practices.

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Information in the news releases is current on the date of the announcement and is subject to change without notice.