Notice Regarding Expansion of Glass Cloth Production Capacity

August 29, 2025

To whom it may concern

Company name: Nittobo (registered as Nitto Boseki Co., Ltd.) Representative: Hiroyuki Tada,

Director, Representative and Chief Executive Officer (Securities Code: 3110, TSE Prime Market)

Contact: Hiroki Kajikawa, Senior Executive Officer

(Tel: +81-3-4582-5040)

Nitto Boseki Co., Ltd. ("Nittobo") hereby announces that, at today's meeting, the Board of Directors resolved to expand production facilities for glass cloth at its Fukushima Enterprise Center.

The rapid evolution and widespread adoption of generative AI technologies in recent years has driven both the performance and the market scale of AI servers. Since the summer of 2023, Nittobo's low-dielectric glass cloth has been adopted for the motherboards of switches used in high-speed chip-to-chip communications within AI servers, resulting in a sharp increase in demand. Beginning in 2024, advanced packaging technology, which enables the high-density integration of multiple chips in semiconductors for AI servers, has entered full-scale adoption. While this technology allows for significant improvements in semiconductor package performance, it also requires larger package substrates, which have highlighted technical challenges such as thermal expansion and warpage. Nittobo's T-glass cloth has been recognized as a highly effective solution to these issues in cutting-edge logic IC semiconductor package substrates, leading to a substantial increase in its adoption for such substrates. With these trends expected to continue, demand for Special Glass is expanding significantly alongside the growth of the AI server market.

Against this backdrop, Nittobo has decided to expand its glass cloth production capacity by constructing a new factory building on the premises of the Fukushima Enterprise Center and installing additional production equipment. The investment will total approximately 15.0 billion yen, with production scheduled to begin in the fourth quarter of fiscal 2026.

Nittobo's glass cloth

For this investment, capital investment to increase production of T-glass cloth for cutting-edge logic IC semiconductor package substrates have been approved by the Minister of Economy, Trade and Industry as a "ensuring supply plan" stipulated in the Act on the Promotion of Ensuring Security through Integrated Implementation of Economic Measures. As a result, Nittobo expects to receive subsidies of up to approximately 2.4 billion yen. If all of the expanded capacity is allocated to T-glass cloth for cutting-edge logic IC applications, production volume could reach roughly three times the current level.

In addition, capital investment support needed for building the new plant has been approved under Fukushima Prefecture's subsidy program to promote industrial revitalization and attract companies to the prefecture.

Nittobo views the approval and subsidy as recognition that its investment plan not only contributes effectively

to Japan's national economic security but also plays a meaningful role in revitalizing a regional economy. Since fiscal 2017, Nittobo has positioned its high value-added strategy as a key management initiative. We have been promoting expansion of Special Glass production capacity through the construction of a new Special Glass plant and additional melting furnaces in Taiwan, as well as conversions of general-purpose glass furnaces to Special Glass ones.

Furthermore, under its Medium-Term Management Plan launched in fiscal 2024, Nittobo announced 80.0 billion yen in capital investments over four years. Already, in less than two years, we have made decisions on the majority of planned projects, and it is on track to execute the plan as scheduled. Even so, given that such investments may still fall short of meeting all market demands, Nittobo intends to continue making timely and appropriate additional investments as necessary, guided by a careful assessment of medium- to long-term market trends.

Nittobo remains firmly committed to working together to build a global No. 1 niche business in the field of electronic materials.

[New Plant Building Details]

Construction Location 20 Ipponsugi, Sakurashimo, Fukushima-shi, Fukushima, Japan Products Special Glass Cloth

Primary Product: Low-thermal expansion glass cloth for cutting-edge logic ICs

Total Floor Area 17,212 m2 (new building); 67,568 m2 (entire plant)

Structure and Scale Steel frame, two-story building Scheduled Construction Start Date October 2025

Scheduled Completion Date December 2026

Rendering of the new factory building Aerial rendering of the factory building