Notice Regarding Withdrawal from the LC Materials Business and the Transfer of Related Intellectual Property

Tokyo, Japan-DIC Corporation today announced that it will withdraw from the liquid crystal (LC) materials business, accounted for in the Color & Display segment, by the end of December, 2024. The Company also announced that concurrent with the withdrawal, it has resolved to transfer ownership of the intellectual property of this business to Shijiazhuang Chengzhi Yonghua Display Materials Co., Ltd. (Slichem), based in the People's Republic of China (PRC).

Reason for Withdrawal from the Business
DIC commenced the production and sale of LCs in 1973. Since then, the Company has worked to grow this business, operating primarily as a supplier of LCs for use in displays. However, the business environment has deteriorated in recent years as a consequence of multiple factors, including intensifying competition with overseas manufacturers. In the DIC Vision 2030 long-term management plan, announced in February 2022, the Company identified thin-film transistor (TFT) LCs, its core LC materials product, as being in need of structural reform and has explored drastic measures to improve the value of the LC materials business.

Despite careful deliberation, the persistently challenging business environment has led the Company to determine that continuing the business would not be feasible, prompting the decision to withdraw. Going forward, DIC will strive to enhance its corporate value by prioritizing the optimal allocation of management resources and ensuring such resources are concentrated in growth businesses with the potential for both swift viability and outstanding profitability.

Overview of Withdrawal
Products: LC materials, including TFT LCs and LCs for passive displays
Locations: Part of DIC's Saitama Plant (Saitama, Japan) and part of two subsidiaries in the PRC (Qingdao DIC Finechemicals Co., Ltd., and Qingdao DIC Liquid Crystal Co., Ltd.)
Date of completion: By the end of December, 2024 (scheduled)

Information on the Transfer of Intellectual Property
Negotiations are ongoing for the transfer of certain components and assets of the LC materials business from which the Company will withdraw to third parties, on the understanding that operations will be maintained. On March 24, 2024, an agreement was reached to transfer the intellectual property of this business to Slichem. As a result of this transfer, DIC expects to record capital gains, as well as to incur expenses related to the closure of facilities, among others, once transfer procedures are completed. Details are currently being finalized. Should any matters arise that require disclosure, the Company will promptly issue notification.

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