Company Briefing for Shareholders (Summary) March 23, 2024
Note : This document has been translated from the Japanese original for reference purposes only.
In the event of any discrepancy between this translated document and the Japanese original, theoriginal shall prevail.
～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～
MEC’s Past and Future～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～
Date and time of the event：Saturday, March 23, 2024
Attendants:MEC

CEO & President

Kazuo MAEDA

MEC

Director & CFO / Executive Operating OfficerToshiko NAKAGAWA

MEC

Corporate Communication Office Head

Aya MATSUSHITA

Overview of the Fiscal Year Ended December 2023 (FYE12/2023)
Summarizing the business environment for FYE12/2023, demand swelled until 2022 tosome extent mainly due to the COVID-19 pandemic. We believe that there was afrontloaded portion included in the demand. As a result, demand became weak fromaround January 2023, and then with an inventory adjustment starting, demand has been
gradually recovering throughout the year. However, overall 2023 saw a stagnant market.
Regarding the overview of major products, sales of the CZ series declined as demand for
related electronic devices was low. V-Bond (hereinafter referred to as “VB”) decreased
due to the condition of smartphones although production of automobiles showed signs ofa slight recovery. EXE posted a little increase as the inventory adjustment of related
electronic devices ran its course. SF was down due to poor demand for related electronicdevices.
Consequently, net sales were 14,000 million yen and operating income came to 2,490
million yen.
FYE12/2024 Consolidated Financial Forecasts
We plan net sales of 16,300 million yen and an operating income of 3,000 million yen.
Company Outline
We are headquartered in Amagasaki, Hyogo Prefecture, where we have our head office,a main factory and an R&D center. The company was founded in 1969.
Shareholder Returns
Total dividends were 45 yen per share, and the payout ratio was 36. 8% for FYE12/2023.
Total dividends are planned to be 45 yen per share with a payout ratio of 39.2% forFYE12/2024. We are striving to continue paying stable dividends with a consolidated
payout ratio of 30% as the guideline.

Company Briefing for Shareholders (Summary) March 23, 2024

Corporate Motto and Management Principle
The corporate motto is “Enjoy your work.” We have held this up since the early days ofour founding. Our management principle is based on three pillars: “VisionaryTechnology,” “Reliable Quality,” and “Meticulous Service.” We hold up the slogan “We
contribute to the creation of a prosperous and diverse society and sustainable
environment, inspired by an unconventional approach based on the principles andcreating and fostering value at various interfaces through global activities.”
Our BusinessWe develop, manufacture and sell chemicals for manufacturing electronic substrates andelectronic components. We develop and sell chemicals that dissolve metals, especiallycopper, and add a variety of value to them. In recent years, products for manufacturing
package (PKG) substrates, which are materials for the semiconductor backend process,have been widely employed for adding extremely high value. We focus on R&D. With athird of all employees on an unconsolidated basis as researchers, we have the policy ofinvesting about 10% of our consolidated net sales in R&D. We are running operations
with an eye on having a production system that enables any of our production bases
across the world to offer products with the same quality. We are sometimes mistaken fora substrate manufacturer, but we are not. Although our company name is MEC, we donot manufacture or sell chemicals for plating (mekki, which sounds like MEC, is theJapanese word for plating).
Sales Evolution since the Founding
Our sales have generally grown since the company founding although there have beenups and downs. The significant point in our business is that the CZ series, which we puton the market in 1995, has come to be used globally. These products have been adopted
by a variety of end-products, driving our earnings. Down the road, sales will be boosted
by 5G, AI/IoT, autonomous driving, digital transformation (DX), green transformation(GX) and others.
Bases in Japan and Overseas
Domestically, we have a factory and an R&D Center in the Amagasaki Head Office. Thereis the Higashi-hatsushima Business Site near the Head Office. The Nagaoka Factory formass-production is situated in Nagaoka, Niigata Prefecture, and we have our Tokyo
Sales Office in Tachikawa, Tokyo. We are operating in these four bases. Overseas, wehave subsidiaries, one in Taiwan, two in China, one in Belgium, and one in Thailand,2Company Briefing for Shareholders (Summary) March 23, 2024with a factory attached to each. As a new base in Japan, we are moving forward with aplan to build a plant in Kitakyushu, and it is scheduled to start operations in 2025.
Flow of Our Products
We set hypotheses, run experiments in R&D, and turn research themes into products forsale. Once a product for sale is finalized, it is handed over to the manufacturing section
to advance the process toward mass-production. Products (liquids) are shipped inpackages of polyethylene containers or tanks. The main destinations are substrate
manufacturers and component manufacturers. Our products end up being incorporated
into various applications.
Fields Where We Can Be Active
It is highly likely that our products have been used in the everyday electrical andelectronic appliances in your home. PCs, smartphones, displays and servers must use
our products. Automobiles too likely employ our products.

Trend in Consolidated Full-year Performance
We posted year-on-year decreases in both net sales and profits for FYE12/2023. We
expect a full-fledged recovery to come after the second half of FYE12/2024. To capture ademand increase, we are also moving forward with the plan to build the Kitakyushu
Factory.
Sales Composition
Chemicals constitute most of our sales.
Sales by Region
Japan accounts for 39. 5% of all sales for FYE12/2023. South Korea makes shipmentsfrom Japan and is included in Japan, accounting for about 15% of total sales. Among ourbases, the percentage of our sales increase in the order of Suzhou, China; Taiwan; andZhuhai and Hong Kong, China. We expect Thailand to increase its importance in thefuture.
Keywords That Relate to MEC’s Growth
5G, AI/IoT, and automobiles are crucial. With 5G already used broadly, the moreadvanced 6G will make the communication speed faster and faster. We think it will3

Company Briefing for Shareholders (Summary) March 23, 2024

become an extremely important source of our business expansion. There is an issue
because AI is expected to consume more electricity as the volume of information
processed increases and as the processing speed rises. We will provide chemicals thatsolve this problem. In the IoT, more and more electronic components and substrates arebeing incorporated into a single electronic device. The IoT and AI are sources of business,
indispensable for us. These technologies can make advancements, in a sense, thanks tothe very availability of our products.
Automobiles are also extremely important in terms of automated driver assistancesystems and connectedness. In response to the increasing global demand forsemiconductors, semiconductor manufacturers are making massive investments. Alongwith investments by semiconductor manufacturers, PKG substrate makers are alsoinvesting. Under these circumstances, we expect demand for our chemicals to rise andwe will ensure we have a production capacity that allows us to fulfill our responsibility
to supply the required products. Moreover, as the technical difficulty level has risen
mainly in cutting-edge areas, we will focus on developing the most advanced products tomatch the technology level and supply them to customers.
Kitakyushu FactoryConstruction started in April 2024 with a total investment of approximately 4,000
million yen, and the cost will be financed primarily by our funds on hand and partly bydebt capital. The production capacity is planned to be a maximum of 30,000 tons per year.
We aim at making a factory equipped with as much automation as possible and new
production technology. It is scheduled to start operating in July 2025. After evaluation
and approval by customers, we expect to start full-scale mass production in the earlysummer of 2026.
Our Core Technologies
1. Roughening copper surfaces to mechanically improve the adhesion to resin.
This is the CZ process, which is employed in the manufacturing process of PKG
substrates, on which semiconductors are mounted.
2. Forming wiring patterns.
Although it is difficult to form fine wiring patterns neatly, the use of EXE makes it
extremely easy to form extremely neat wiring patterns.
3. Allowing selective etchingThis is a technology that ensures when two or more different kinds of metals aremounted on the same substrate, only one will be kept intact and the others dissolved and4

Company Briefing for Shareholders (Summary) March 23, 2024

removed. For example, our product has the function of removing metals such as nickel,chrome, and nichrome, and leaving copper wiring intact.
4. Treating copper surfaces to chemically improve adhesion.
This technology is the same as CZ, mentioned first, in terms of adhesion enhancement,
but it can also boost adhesion strength. It works by skipping the roughening step, andchemically forming a thin film between resin and copper and adding an adhering orcrimping treatment. It provides adhesion equal to or stronger that of roughening. This
process is employed for the most advanced substrates.
Major Chemicals and Examples of Their End Products
As examples of its end products, CZ is employed in difficult-to-produce areas of data
centers, PCs, smartphones, tablet PCs, etc. VB is used in multilayer substrates insideautomobiles, smartphones, and others. EXE is used as a wiring-formation chemical formonitors of TVs, PCs, and others. SF is adopted in the manufacturing of tablet PCs as acopper-selective etching solution.
Fields in Which We Excel
The fields where we excel are the parts of PKG substrates that are technically highly
difficult to produce. The lower the technical difficulty is, the lower our market share is.
Flexible substrates were originally a segment of the market where our share was low.
However, as the function of flexible substrates has been upgraded, our chemicals havebeen adopted more broadly, causing our market share to grow.
PKG Substrates and CZ Series
CZ is used nearly 100% of the manufacturing of PKG substrates as a chemical that
improves adhesion between copper and resin. CZ melts copper wires slightly to shapethem into a unique convex and concave copper surface topography, thereby enhancing
the adhesion strength.
Evolution of PKG Substrates
The structure up to the present has one semiconductor mounted on one PKG substrate.
Recently, a structure called a chiplet, where multiple semiconductors are mounted on
one PKG substrate, has emerged. This seeks to improve yields and upgrade performance
without increasing costs extremely. Additionally, for further performance improvement,
there is also the most advanced product that has a structure that employs siliconinterposers and silicon bridges between semiconductors and PKG substrates. By5

Company Briefing for Shareholders (Summary) March 23, 2024

adopting such a structure, the size of a PKG substrate becomes larger, and the numberof layers is expected to increase, and this can lead to an increase in the volume of our CZ
used.
Roadmap of CZ Series
Our present major product is CZ-8101. In anticipation of the future evolution of PKG
substrates, we completed the development of CZ-8201, which roughens more finely, andCZ-8401, which roughens much more finely. Customers have started using such products.
Additionally, we are developing a type of product that realizes chemical adhesion thatsticks copper on resin without the need for roughening.
Toward Expansion of Business Domains
Our major business and technologies are evolving. We are digging deep and pushing
forward with technological development. In addition to that domain, we are also
expanding applications of our existing technologies and are engaged in new businesses.
We are a technology-based company, and we have technology at our core and arecommitted to R&D.
Medium-Term Management Plan
We are moving forward with a three-year plan with 2022 as its first year as we looktoward 2030. Our vision is to tackle the challenges of achieving a sustainable society incollaboration with customers by creating new value with unique technology.
The Company That We Aspire to Be“Become a truly global company that creates new value through original technologies.”“Continue to be an R&D-oriented company.”“Be a representation of an original AI company.”
With the above aspirations, our thinking is to remain an R&D-based company andposition technology as the center. We are also thinking of establishing a meaningfulpresence as an AI company. It is extremely important to face customers with integrity.
Numerical Targets in Present Medium-term Management Plan
Our goals are to secure an operating profit ratio of at least 20% and ROE of 10% or more.

6Company Briefing for Shareholders (Summary) March 23, 2024

Q&A
Question 1: Since the Company has a high market share, is that why the company’sperformance is affected by demand for the entire industry?
President: That is correct. We aim at building several business pillars in fields where wecan leverage our technologies. By doing so, we intend to smooth out any peaks andtroughs in our performance.
Question 2: There are plenty of companies entering such fields anew, aren’t there?
President: Such fields demand high technological levels and are niche markets.
Therefore, there are few companies expanding into them. In cutting-edge and newtechnological domains, there are roughly one or two companies that are aiming at doing
things similar to us. We are proud to be absolutely leading the technology of treating
copper.
Question 3: If you say that the domains where MEC excels are products with hard-toreach technical levels, can you afford to withdraw from the technology for other products?
President: It is possible that customers’ technologies will be upgraded. Therefore, we arepreparing for such situations. We want to closely watch technological trends.
Question 4: What do you think of the impact on the environment of the disposal of liquid
waste?
President: Liquid waste is disposed of by our customers. We concentrate on designing
products that can be applied to waste liquid treatment. We check the situation carefullywith customers and sell our products after obtaining their approval.
Question 5: Do you have products other than the four major ones?
President: Yes, we do.
Question 6: Share with us the situation of the creation of new businesses and thebroadening of applications of existing technologies.
President: We do not publicize quantitative figures, but we have plans and have been
moving forward with them.
Question 7: Is it true that CZ cannot be copied easily?
President: Yes, we firmly protect it with patents.

7

Company Briefing for Shareholders (Summary) March 23, 2024

Question 8: Will CZ or other products cease to be used in the future?
President: We believe that substrates and semiconductors will remain absolutely
necessary in the future.
Question 9: Can you share with us the fields where you expect PKG substrates to grow?
President: At this moment, investments in AI servers are booming. We also look forward
to an increase in the number of standard high-speed processing servers.
Question 10: Where do you deliver your products?
President: The destinations are manufacturers of electronic substrates and electroniccomponents.
Question 11: What is your forecast for the external environment in 2024?
President: We expect the number of AI servers and standard high-speed servers toincrease. Also, demand for PCs and smartphones will also return slightly as the economy
goes through phases of the business cycle. Regarding automobiles, we expect products
related to autonomous driving to increase.
Question 12: Was the recovery for the current fiscal year due to quantity or prices?
President: For the fiscal year ending December 31, 2024, we do not factor in aquantitative recovery to that extent.
Question 13: Share with us the direction of the 2030 Vision.
President: We are thinking of further expanding existing businesses and embarking onother markets by using our core technology in a technological manner.

8