CitlICapital Increase and dRt Restruct tiuring Pl an, and New Medium-Term Management Strategy

March 3, 2015

Disclaimers

This material was prepared for the purpose of providing information to our shareholders. It does not, in any jj,urisdiction, constitute a solicitation of securities issued by the Comppyany. Forecasts, estimates, outlooks, and other forward-looking information and statements contained herein have been prepared based on the information available to the Company as of today and on certain premises or assumptions (including those based on our subjective judgments). Changes in the domestic and global economic situation, semiconductor market situation, foreign exchange rate trends, and other risk factors may cause actual performance and results to differ substantially from those expressed or implied in any forward-looking information and statements hiherein. This material does not constitute an offer of securities for sale in the United States. The securities referred to herein have not been, and will not be registered under the United States Securities Act of 1933, as amended (the “Securities Act”). The securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act. The securities referred to herein will not be publicly offered or sold in the United States.

2 Executive Summary

Our Strength Our Strength An industry-leading An industry-leading level of profitability technology achieved through and customer base completion of Business Reorganization Plan

Business / Market Environment Investment Strategy Financial Strategy Growing semiconductor Achieve sustainable earnings Achieve sound financial device market drives growth by maintaining industry- base through Capital strong wafer demand leading technical capabilities as Increase and Restructuring well as long-term client Plan, including replacing and requires precision relltiations hips, an dbd by execu ting Class St ock with common enhancement disciplined capital spending stock, more stable capital

„ Based on sustainable earnings growth, aim to secure profitability even amid unfavorable business conditions, and during favorable periods, achieve ROE that is considerably higher than FY2014 ROE „ Aim to strengthen our financial condition further, further, with a target of achieving a shareholders’ equity ratio of over 50% and a D/E ratio of less than 0.5x „ Aim for flexible and proactive shareholder returns in accordance with future income conditions 3

Contents

I. Capital Increase and Restructuring Plan

II. Market Environment and Our Strengths

III. New Medium‐Term Management Strategy

IV. Summary I. Capital Increase and Restructuring Plan

II. Market Environment and Our Strengths

III. New Medium‐Term Management Strategy

IV. Summary

Key Measures Executed under Business Reorganization Plan

Key Measures Results „ Solar Wafer Business „ Executed as planned — Withdrew from Solar Wafer (January 2012) Business by January 2012

„ 300mm „ Cancelled complete shutdown in — Shutdown 300mm line at response to EW demand increase Nagasaki plant / Cost Reduction (January 2013)

„ 200m „ Executed as planned — Shutdown of Ikuno (July 2013) plant / Cost Reduction

„ 150mm and less „ Executed as planned — Shutdown 150mm line at Imari (July 2013) plant / Cost Reduction

„ Personnel Plan „ Executed as planned — Reduce 15% of consolidated (July 2013) employees (approx. 1 ,300 workers)

6 Our Improved Margin Structure and Current Balance Sheet Status

Results of Cost Reduction and Efficiency Measures Balance Sheet Status (as of December 31, 2014)2 26 (¥ Billion) 18 Operating Income 16 Cash: ¥65.7bn Net Income 13 Interest-bearing debt: 3 ¥217.3bn 1 1

Shareholders’ Class Stock: (84) equity: ¥45.0bn 2011 2012 2013 2014 ¥185.0bn (11 Months) 27 Distributable (¥ Billion) amount: ¥19. 2bn

32 Total assets: ¥510.6bn 26 15 Post-Class (()5) Current Stock Adjustment 1 Shareholders’ 36% 30% Equity Ratio 1 (44) D/E Ratio 1.2x 1.6x FY2011 Cost Cost Depreciation Quantity, FX Rate, FY2014 Operating Reduction Increase Price, etc. Operating Income and Income (Actual) Product-Mix (Actual)

1 Calculated assuming the amount remaining after ¥45.0bn in Class Stock is subtracted from ¥185.0bn in shareholder’s equity is treated as shareholder’s equity. 2 All numbers relating to balance sheet are consolidated numbers, except for distributable amounts that are non-consolidated numbers 7

Capital Increase and Restructuring Plan - Objectives

SUMCO has steadily implemented various measures included in the Business Reorganization Plan and achieved an industry-leading level of profitability. However, because the overall business environment surrounding th e C ompany was weak er th an anti ci pat ed at th e ti me of f ormul ati on of th e B usi ness Reorganization Plan, the Company has not been able to improve its balance sheet as anticipated

The put option with respect to Class A Stock issued upon the fformulationormulation of Business Reorganization Plan, the consideration for which is cash and Class B Stock, will become exercisable from May this year. Therefore, it is expected that the shareholders of Class Stock will exercise their put option from time to time, and capital and cash will be reduced thereby

On the other hand, SUMCO recognizes a spread of the growth opportunity, given the recovery in the business environment since last year, the tightening of demand/supply and the increasing demand for high-precision products which is one of the Company’s strengths

The Company has determined that exchanging Class Stock, whose put option is anticipated to be exercised from time to time, for common stock, which is a more stable form of capital, and further infusion of capital will help to (i) strengthen its financial base and establish the ability to make disciplined capital expenditures and (ii) establish a basis for realizing flexible shareholder returns

SUMCO will pursue medium-to-long-term earnings growth and enhancement of shareholder value through steady implementation of its New Medium-Term Management Strategy 8 Overview of Class A Stock and Class B Stock

„ Principal amount: ¥45bn „ Shareholders： Nippon Steel & Sumitomo Metal Corporation (“NSSMC”), Mitsubishi 既存種類 Materials Corporation (“MMC”), Japan Industrial Solutions Investment Limited Overview Partnership I(I (“JIS”) 株式の概要 of „ Consideration of put option of Class A Stock, exercisable from May 11, 2015: Outstanding — 1) Cash and Class B Stock (20% of the principal amount of Class A Stock); or Class Stock — 2) Common stock worth the principal amount of Class A Stock „ Put option of Class B Stock: — 3) Common stock worth the value of Class B Stock May 11, 2015

1) Put option , the consideration of which Cash: is cash and Class B Stock 3) Put option, the consideration of Class A Stock: ¥45bn which is common stock ¥45bn Common Stock: Class B Stock ¥9bn equivalent

2) Put option, the consideration of which is common stock Class A Stock: Common Stock: ¥45bn ¥45bn equivalent

In accordance with Memorandum of Understanding, SUMCO will acquire/repurchase and cancel all of Class A Stock and Class B Stock to avoid the dilution of common stock, which could happen when Class Stock is converted to common stock

Note: The overview of Class Stock above only describes key points. For details, please refer to Slide P30 9

Significance of Implementing Capital Increase and Restructuring Plan

Elimination of uncertainty „ The ongoing need to be prepared for potential cash redemption of ¥45.0 billion regarding potential would place large constraints on our financial strategy going forward exercise of put option of „ Cancellingggg all Class A Stock and strengthening our financial base will enable Class A Stock (the SUMCO to achieve sustainable earnings growth and make timely and consideration is cash and disciplined strategic investments under the New Medium-Term Management Class B Stock) Strategy Elimination of uncertainty „ Eliminate potential dilution, equivalent to a maximum of approximately 25% regarding potential of outstanding shares, upon the exercise of the put option attached to Class exercise of put option of A Stock Class A Stock (the consideration is common stock) Elimination of uncertainty „ Eliminate concerns regarding potential dilution from issuance of common regggarding potential stock eqpquivalent to ¥9.0 billion which could be delivered upon the exercise of exercise of put option of put options attached to Class B Stock Class B Stock (the consideration is common „ Avoid share price impact from sale of common stock which is anticipated stock) upon the conversion from Class B Stock to secure economic returns Provide appropriate „ Reduce preferred dividend obligation (approximately ¥1.13 billion per annum) shareholder returns by acquiring all outstanding Class Stock „ Enhance shareholder return for common stock through acquisition/repurchase and cancellation of all outstanding Class Stock „ Increase dividend per share to ¥4 for FY2014 10 Capital Increase and Restructuring Plan - Transition of Shareholders’ Equity

Distributable Amounts and After Cancellation Dec. 31, 2014 Class Stock Acquisition/Repurchase and Cancellation of Class Stock

¥185.0bn ¥188.8bn

Class Stock ¥45.0bn Increase in Decrease in Distributable Distributable Amounts Amounts

Investment for ¥140.0bn Growth and Financial Base Strengthening ¥30.0bn

Class A and B Stock to be acquired/ Public Redemption repurchddhased and cance lldMlled on May Equity of Class Stock 11, 2015 or closing date of the 2 Offering ¥30.0bn public equity offering, whichever is later (¥36.0bn) Reduction in the Amount of Capital Distributable Dividend and Others1：¥2.4bn Reserve: ¥9.0bn Amounts3 Dis tr ibu ta ble Distributable Distributable Class A an d B Stoc k to be acqu ire d/ Amounts Amounts Amounts repurchased and cancelled on May ¥31.8bn ¥19.2bn after Dividend after Dividend 11, 2015 (¥18.0bn) ¥16.8bn ¥16.8bn Other Capital Surplus: ¥5.2bn Other Earned Surplus: ¥11. 7bn

Note: All numbers relating to balance sheet are consolidated numbers, except for distributable amounts that are non-consolidated numbers 1 Dividend and others include dividend for common stock (¥1.03bn), dividend for Class Stock (¥1.125bn) and reserve of legal retained earnings for the two dividends (¥0.216bn) 2 ¥60.0bn is based on the amount that is scheduled to be issued as stated on the shelf registration statement. The figure may change due to market conditions and other factors 3 Distributable Amounts (¥31.8bn) = Distributable amounts after dividend ¥16.8bn + Reduction in the amount of capital reserve (¥9.0bn) + Public Equity Offering (¥60bn) – acquisition price of Class A Stock and Class B Stock (¥36.0bn) (to be acquired on May 11, 2015 or closing date of the public equity offering, whichever later) – acquisition price of Class A Stock and Class B Stock (¥18.0bn) (to be acquired on May 11, 2015). Accrued dividend amount after the end of December 2014 is not considered 11

Overview of Capital Increase and Restructuring: Memorandum of Understanding Concerning Treatment of Class Stock

„ The shareholders of Class Stock shall in principle not convert either Class A Stock or Class B Stock into common stock „ The Company will acquire and cancel 150 shares of Class A Stock (worth ¥15bn) and 150 shares of Class B Stock (worth ¥3bn) within the distributable amount on the Agreed Terms B/S as of December 2014 with Class „ The Comppyany will conduct a public e qyquity offerin g in Ja pan based on the shelf Shareholders registration statement on March 3. On the later of the closing date or May 11, 2015, the Company will acquire and cancel 300 shares of Class A Stock (worth ¥30bn) and 300 shares of Class B Stock (worth ¥6bn) „ The exppyiry date for the MOU shall be March 10 , 2016, the same as the shelf registration

„ To conduct the agreements above, the Company will submit the following agenda items at th e ordinary genera l mee ting o f s hare ho lders sc he du le d on Marc h 25, 2015 Matters for Resolution at — To reduce capital reserve (worth ¥9bn) to secure distributable amount to be General applied to acquisition of Class B Stock Shareholders — To set up a stock repurchase program to acquire Class B Stock (to repurchase up Meeting to 450 shares of Class B Stock for ¥9bn, with an acquisition period ending March 10, 2016)

Note: The Class A shareholders are to exercise their put options, the consideration for which is cash and Class B Stock. After immediately repurchasing the Class B Stock, the Company will promptly cancel both Class A and Class B Stock. 12 Secondary Offering by Major Shareholders

„ Upon the issuance of new shares based on the shelf registration statement dated on March 3, NSSMC and MMC, the two major shareholders of the Company, are scheduled to sell a portion of their respective holdings of the common stock of the Company (the same number of shares are to be sold by both companies) in a secondary offering

„ The number of shares of common stock to be sold under and the scale of the secondary offering by the two major shareholders will be determined based on factors including market conditions and the extent of dilution of the shareholding ratio of both companies as a result of the offering — The details regarding the time, method of issuance (secondary offering), terms and conditions of issuance (secondary offering), the aggregate issue (selling) amount and other matters of the ppyrimary offerin g and the secondar y offerin g have not been determined

„ There will be no change in the Company’s status as an equity-method affiliate of the two major shareholders for the time being follow ing the secondary offering by the tw o major shareholders

13

Process Overview of Capital Increase and Restructuring Plan

March April May June July~

Press release Ordinary Put option exercise period start date Events of capital policy general for Class A Stock (3/3) meeting (5/11) (3/25)

Transfer of capital reserve (Reduction in the amount Public notice Voting at Effective ordinary of capital reserve) (3/11) date general (4/14) meeting (3/25) Agenda on the

ck ordinary general o Aiiti/RhAcquisition/Repurchase an d meeting has been Cancellation of ¥18bn in approved Class A and B Stock (5/11) Payment for the Acquisition/Repurchase and

shareholders public equity hree Class St Cancellation of ¥36bn Either May 11, 2015 or the closing date for the T offering has been public equity offering, whichever comes later completed in Class A and B Stock

Public equity offering Shelf registration She lf r egist r ati on peri od (~2006/3/016/3/10) (3/3)

Transfers of capital stock, capital reserve (Reductions in capital The same date as closing date for the public equity offering stock, capital reserve)

Note: The Company plans to conduct a public equity offering in Japan during the period for the shelf registration. However, the details regarding the issue date, method of issuance, terms and conditions of issuance and the aggregate offering size have not yet been determined, and the Company will determine such matters by comprehensively taking into consideration market trends and other relevant factors. 14 I. Capital Increase and Restructuring Plan

II. Market Environment and Our Strengths

III. New‐Medium Term Management Strategy

IV. Summary

Market Environment: Diverse Applications Fuel Robust Growth of Semiconductor Device Market

„ Further diversification and innovative applications continue to fuel semiconductor market growth Internet of Things Advanced functions Diversification Automobiles Digital appliances, wearable devices

Game consoles

Smartphones, tablets

4G 3G 2.5G Servers, 2G cloud computing, data centers

PCs

16 Market Environment: Growth Drivers for 300 mm Wafers

„ Applications of 300mm wafers are ~70% memory and ~30% processors „ 300mm wafers for NAND usage are driven by mobile handsets and datacenter SSDs

By devices By NAND Usage 100% Consumer and others Others (Dig ital C amera, M usi c Pl ayer, et c.)

80% Logic (MPU, AP, etc.)

Memory Card 60%

Mobile Handsets Handsets (Smartphone, Tablets, 40% (Smartphone2-in-1, Tablet PC) , 2in1 PC) Memory (DRAM, NAND, etc.) 20%

SSD

0% 2012 2014 2016 2012 2014 2016 Source: SUMCO estimates Note: Excluding test wafers.

17

Market Environment: Capital Spending by Device Manufacturers increasing since 2014 „ Aggressive capital spending on leading-edge processes in both logic and memory „ For memory, smartphones and servers drive demand, leading to capital spending for capacity expansion WldidSWorldwide Semi cond uct or C apit itlSal Spendi di¹ng¹ RtTdbMjPlRecent Trends by Major Players 80,000 „ Samsung: Capital Spending is expected to be larger in 2015 than 2014. 300mm/14nm capacity 70,000 65, 290 66,797 expansion for logic, and for DRAM new investments for capacity as well as investments 60,000 57,840 for scaling technology for 20nm „ TSMC: Maximum capital spending of $12bn. 50,000 Capacity expansion of 300mm/16nm and investments in 10nm generation will account for 40,000 more than 80% of its capital spending „ SK Hynix: Planned capital spending of W4.8~4.9 ($ Million) 30,000 tn (approximately ¥440 ~ 450bn); approximately half of which will be for 300mm/22nm DRAM fab 20,000 „ Toshiba: Maintain capital spending of ¥200bn for FY2015. Predominant portions are allocated for 10, 000 memory investment . New facility for next generation 3D-NAND has commenced 0 „ UMC： $1.8bn for semiconductor capital 2013 2014 2015 Estimate spending, up 30% y/y in 2015. 89% for 300mm, ¹ Source: Gartner Research “Forecast: Semiconductor Capital Spending, deployed mainly for expanding 28nm generation Worldwide, 4Q14 Update” (As of December 18, 2014). Graphs Source: Publically Available Information generated by SUMCO with Gartner Research Data The Gartner Report(s) described herein, (the "Gartner Report(s)") represent(s) data, research opinion or viewpoints published, as part of a syndicated subscription service, by Gartner, Inc. ("Gartner"), and are not representations of fact. Each Gartner Report speaks as of its original publication date (and not as of the date of this 18 presentation) and the opinions expressed in the Gartner Report(s) are subject to change without notice. Market Environment: 300mm Wafer Demand Trends

„ Wafer market shows strong growth backed by continuing device market expansion „ Tightening supply-demand condition lays the groundwork for price improvements Global 300mm Wafer Demand Forecasts¹

8,000 2014-2018 CAGR： 5.1%

7,000

6,000 2014 W/W Wafer Supply Capacity (SUMCO Estimate) ches) 5,000

4,000 s of Square of s Square In n 3,000

2,000 MSI (Millio

1,000

0 2012 2013 2014 2015 2016 2017 2018 Estimate ¹ Source: Gartner Research “Forecast: Semiconductor Silicon Wafers, Worldwide, 4Q14 Update” (As of December 18, 2014). Graphs generated by SUMCO with Gartner Research Data

19

Market Environment: 200mm Wafer Demand Trends „ Decreasing demand for 200mm wafers showing signs of leveling off and beginning to increase „ Recent demand driven by devices for automotive applications and smartphones „ Focusing on power IC/CIS realm, where our technical advantage can be leveraged most

Global 200mm Wafer Demand Forecasts Increase in Semiconductors for Automotive Uses

4,000 MOSFET Analog IC

3,500 Power IC Pressure sensors

3,000 Driver IC s) e Accelerometer 2,500 IPM

f Square Inch f Square 2,000 IGBT MCU o

1,500 Devices Used in Smartphones

Camera image

MSI (Millions Power IC 10001,000 sensors

500 MEMS sensors Discrete IC

Fingerprint 0 Power MOSFET 2007 2008 2009 2010 2011 2012 2013 2014 authentication Source: SUMCO estimates sensors 20 Market Environment: Advancement in Scaling of 300mm Wafer

Technology Node Transitions of 300mm Wafer 300mm Wafer Demand by Technology Node

70 100% DRAM NAND NAND-3D LSI/AP MPU 90% 40 nm up 60 80%

nm) 50 ( 70% 28/32 nm

40 60%

50% 20/22 nm gy Node gy

o 30 Higher capacitor/ 40% aspect ratio 20 30% 14/16 nm Technol 10 20%

10/12 nm FinFET 3D-NAND 10% 0 0% 011 007 008 009 010 012 013 014 015 016 017 018 019 2012 2013 2014 2015 2016 2017 2018 2019 2 2 2 2 2 2 2 2 2 2 2 2 2 (1) Developing advanced semiconductors is becoming more time consuming, but scaling will continue. (2) Requirements for high-precision wafers are becoming increasingly high and tolerance margins are narrowing. (3) SUMCO continues to invest in R&D and mass-production technologies to refine its technologies related to controlling minute crystal flaws , processing high -precision wafers, growing epitaxial films with superior uniformity, and controlling the film-growth process.

Source: Industry Research & Statistics, SEMI (Christian Gregor Dieseldorff and Clark Tseng, June 30, 2014) and SUMCO estimates 21

Our Strengths: Advancement in Scaling – a Tailwind for SUMCO

„ SUMCO’s strength lies in its collaboration with customers on higher-precision wafers based on constructive relationship „ Only a limited number of wafer suppliers are capable of supporting such products Semiconductor Revenue of Major IDM/foundries (2014)¹ High Recognition from Our Customers

(Unit: USD million) 0 20,000 40,000 60,000 Supplier Continuous Intel Quality Improvement Award „ Awarded for the 12th consecutive year Samsung and 13th time overall, out of more than 10,000 suppliers (First among all global suppliers) TSMC Samsung Award of Honor Micron Technology² (Special Award) Best Partner Award „ First silicon maker to receive the SK Hynix Samsung Prize (Special Prize) in 2012, also receiving the Best Partner Award Texas in 2013 for our outstanding Instruments contribution to business development Excellent Quality Toshiba Technical Support Award „ The first silicon wafer maker to STMicroelectronics win a Technical Support award from a major TSMC plant Source: Company disclosure Note: Sales numbers of Samsung and Toshiba only include semiconductor business segment ¹ Average exchange rates for January to December in 2014 were used to translate results in foreign currencies into US dollar ($1=W1,053.6, $1=TW $303 and $1=¥105.8) ² Sales number of Micron Technology is twelve-month sales from November 29, 2013 to December 4th, 2014 22 Our Strengths: An Industry Leading Position Customer Base and Profitability

Net Sales Trends by Key Players1,2 Operating Margin Trends by Key Players1 350 20 %

288 300 285 15 % 277 13.8 %

247 246 250 10 % 11. 4 % 225 220 207 210

200 185² 5 % ion) l

(¥Bil 150 0 % (1.0)% 119 120³ 110 (2.1)% 96 100 87 89 89 89 (5)% 82 83 (5. 0)% 78 73 74 76

50 (10)%

0 (15)% 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 SUMCO Company A Company B Company C Company D SUMCO Company A Company B Company C Company D Source: Company disclosure Note: Net sales and operating margin of the semiconductor silicon wafer business of each company. Figures as of the end of 2014 including some preliminary results. 1. Average exchange rates for January to December each year were used to translate results in foreign currencies into yen. (Average exchange rates for 2010, 2011, 2012, 2013 and 2014: $1=¥87.6, ¥79.7, ¥79.8, ¥97.6 and ¥105.8; 1 Euro=¥116.2, ¥110.0, ¥102.6, ¥129.7 and ¥140.4, 1 won=¥0.08, ¥0.07, ¥0.07, ¥0.09 and ¥0.10) 2. Due to a change in our reporting period, SUMCO’s FY2013 results are for the 11-month period ended December 31, 2013 23

I. Capital Increase and Restructuring Plan

II. Market Environment and Our Strengths

III. New Medium‐Term Management Strategy

IV. Summary Financial strategy: Strengthening Our Balance Sheet

„ Through the Capital Increase and Restructuring Plan, we aim to build a financial base that will enable disciplined growth investment and flexible return to shareholders. We will further strengthen our financial health by continuing to accumulate our excess profits Current As Adjusted: (as of December 31, 2014) Post-Capital Restructuring¹ Cash: Cash: ¥65.7bn ¥50.0bn Interest- Interest- bearing debt: bearing debt: Financial ¥217.3bn ¥197. 8bn TtTargets

„ Shareholders’ equity ratio: Class Stock: 50% or high er ¥45.0bn Shareholders’ Shareholders’ „ D/E ratio: equity: equity: 0.5x or less ¥185.0bn ¥188.8bn

Total assets: ¥510.6bn Total assets: ¥494.9bn Post-Class Current Post-Capital Restructuring Stock Adjustment1 Shareholders’ 36% 30% 38% Equity Ratio D/E Ratio 1.2x 1.6x 1.0x

¹ ¥54.0bn (Class A/B Stock) subtracted from cash and shareholders’ equity on the balance sheet as of December 31, 2014. ¥60.0bn added to cash and shareholders’ equity on the balance sheet after Class Stock adjustment. (¥60. 0bn is only indicative up to the amount that is scheduled to beie issued as stated on the shelf registration statement. The figure may change due to market conditions and other factors.) Assumes interest-bearing debt will be repaid until cash reaches ¥50.0bn (minimum cash on hand of ¥20.0bn + ¥30.0bn in reserves for growth investment and strengthening of financial condition). These figures take into account the following items expected as of December 31, 2014: common stock dividends (¥1.03bn); Class Stock dividends (¥1.125bn); and transfer of legal retained earnings (¥0.216bn) ² Calculated assuming the amount remaining after ¥45.0bn in Class Stock is subtracted from ¥185.0bn in shareholder’s equity is treated as shareholder’s equity 25

Business and Investment Strategy

Strategic Measures „ Continue to obtain new business opportunities by leveraging our differentiated products developed through collaboration with customers in leading-edge products, Customer utilizing SUMCO’s advanced wafer technology, as well as its long-term constructive Strategy customer relationships „ Establish stable business foundation by deepening relationships with a broad customer base, creating resiliency to performance of individual customers „ Tiggghtening in market su ppypply and demand gpgap indicates si gns of inflection point in pricing „ As demand for wafers increases, we aim to improve / normalize price to a level where Pricing deploying additional capital for capacity expansion becomes economically rationale Strategy „ As excessive price improvement could induce competitors to increase their capital expenditures beyond justified levels, will aspire to maintain appropriate price levels in conjunction with proper implementation of our capital expenditures strategy

„ Continue to focus on areas in which SUMCO’s technological competitive advantage Product could be leveraged Development — High precision 300mm EW / PW, etc. Strat egy — 200mm wafers for Power IC/CIS usage, etc.

26 Business and Investment Strategy

Strategic Measures „ Capital Ex penditu res Phase 1 (pre-full scale price improv ement): Primarily focu s on capital expenditures for high-precision wafers with no substantial capacity expansion — Adoption of next-generation high-precision compatible development equipment for 300mm products, etc. „ Capital Expenditures Phase 2 (post- full scale price improvement): Establish an even more solid position through disciplined capital expenditures for capacity expansion Capital Expenditures — Subject to sufficient price improvements and price normalization , implement timely Strategy and disciplined capital expenditures, while paying due attention to maintaining an appropriate supply and demand balance in the industry — After price improvements are achieved, implement capital expenditures in a flexible manner, gradually pursuing high-efficiency investments in debottlenecking — Make investments to increase production capacity in response to customers’ needs, but only where sufficient return on investment is expected „ RlidRealized a s tream liddlined and res ilitilient cos tttt structure thhthrough execu tilting large-scale structural reforms under Business Reorganization Plan Cost Strategy „ Absorb increasing depreciation expenses as much as possible by rationalizing costs through ongoing Kaizen efforts

27

I. Capital Increase and Restructuring Plan

II. Market Environment and Our Strengths

III. New Medium‐Term Management Strategy

IV. Summary Summary

Our Strength Our Strength An industry-leading An industry-leading level of profitability technology achieved through and customer base completion of Business Reorganization Plan

Business / Market Environment Investment Strategy Financial Strategy Growing semiconductor Achieve sustainable earnings Achieve sound financial device market drives growth by maintaining industry- base through Capital strong wafer demand leading technical capabilities as Increase and Restructuring well as long-term client Plan, including replacing and requires precision relltiations hips, an dbd by execu ting Class St ock with common enhancement disciplined capital spending stock, more stable capital

„ Based on sustainable earnings growth, aim to secure profitability even amid unfavorable business conditions, and during favorable periods, achieve ROE that is considerably higher than FY2014 ROE „ Aim to strengthen our financial condition further, further, with a target of achieving a shareholders’ equity ratio of over 50% and a D/E ratio of less than 0.5x „ Aim for flexible and proactive shareholder returns in accordance with future income conditions 29

Reference: Overview of Class A Stock and Class B Stock

Class A Stock Class B Stock 450 No. of issued No. of authorized 450 shares shares *When “put option in exchange for cash and Class B Amount paid per ¥0.1 billion per share Stock” is exercised, 1 Class A share is exchanged for 1 share (Total amount paid: ¥45.0 billion) Class B share

Dividend of ・Preferred dividend (Annual dividend rate: 2.5%) Dividend of surplus ・Same order of preference as common stock surplus ・Non-participating/Accumulated dividend ・Non-participating/Non-accumulated dividend Distribution of ・Preferred distribution residual assets ・Amount equivalent to paid-in amount (+ accrued dividend Distribution of ・Same order of preference as common stock amount, etc.) residual assets ・¥20 million per share Voting rights None Voting rights None Supplementary ・Put option the consideration for which is cash and Class B items Stock (1) Supplementary items ・Put option, the consideration of which is common stock ・Put option the consideration for which is common stock (2) (4) ・CllCall op tion the cons idera tion for w hihihich is cas h(3) ・Call option, the consideration of which is cash (5)

Options Description Execution period

Class (1) Put option, the consideration of which is cash Cash amount: Amount equivalent to Class A paid-in amount (+ accrued dividend From May 11, A and Class B Stock amount, etc.) 2015 NbNumber o f Class B Stoc k: 1ClA1 per Class A Stock

(2) Put option, the consideration of which is No. of common stock: Amount equivalent to Class A paid-in amount (+ accrued From May 11, common stock dividend amount, etc.) divided by acquisition price (VWAP average of the 2015 Company’s common stock for the 20 consecutive trading days preceding the put date (minimum acquisition price: ¥700))

(3) Call option, the consideration of which is cash Cash amount: Amount equivalent to Class A paid-in amount From May 11, (+ accrued dividend amount, etc.) 2016

Class (4) Put option, the consideration of which is No. of common stock: ¥20 million per Class B stock divided by acquisition price From May 11, B common stock (VWAP average of the Company’s common stock for the 12 consecutive trading 2015 days preceding the put date (minimum acquisition price: ¥200))

(5) Call option, the consideration of which is cash Cash amount: ¥20 million per Class B stock From May 11, 2016 30