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Komatsu (KMT)


Friday 08 October, 1999


Disposal of Interest

28 September 1999


Komatsu has signed a letter of intent to sell its 50% interest in Applied
Komatsu Technology, Inc. (AKT), a 50-50 joint venture with Applied Materials,
Inc., to the American partner and convert it into a 100% Applied Materials-owned
subsidiary.  Transfer of the shares is scheduled to take place at the end of

Applied Komatsu Technology was formed in September 1993 as a 50-50 joint venture
between Applied Materials, Inc. and Komatsu Ltd.  The company develops
manufactures and markets fabrication equipment used to produce Flat Panel
Displays (FPDs), which are mainly used to portable computer displays.

Like other semiconductor-related markets, the FPD market represents a
leading-edge business arena where technological innovation takes place at
dazzling speeds.  Hence, making constant, large-scale R&D investments is
indispensable to beat the competition.  The market is also typically cyclical in
nature with considerable ups and downs, which resulted in AKT recording a
significant loss in fiscal 1998.

Nonetheless, there still remains continued growth potential in the market,
albeit to a size less than expected at the time of founding AKT, with the center
of gravity shifting from Japan to Korea and Taiwan.  Such fierce changes in the
business environment have called for quicker, flexible management judgement on

In that context, Komatsu and Applied Materials have had a series of repeated
discussions on the future directions of AKT since last fall, leading to a
conclusion that the best option is for Applied Materials to acquire Komatsu's
entire holding and make AKT its wholly-owned subsidiary.  Hence, reaching this

Upon the transfer of ownership, Applied Materials will succeed all business of
AKT, whereby relations with the AKT's customers and other concerned parties 
will remain intact.

Outline of Applied Komatsu Technology, Inc. (AKT)

Location:           5-133, Hattori Kotobuki-cho, Toyonaka, Osaka 561-0857
Established         September, 1993
Capitalization:     Y2,929 million (as of the end of May, 1999)
Director:           Howard Neff
No. of Employees:   333 (as of July, 1999)
Line of Business:   Manufacture and sale of liquid crystal panel manufacturing


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