| NGK Insulators, Ltd. is investing in a commercial production facility for the ceramic diesel particulate filter (DPF). This DPF is used in equipment for removal of diesel particulate matter in exhaust gas. Diesel emission regulations will become more stringent from 2005 through 2007 in Japan, the USA and Europe, and car manufacturers have developed various types of systems for exhaust gas purification. In order to adapt to those technologies, NGK has developed a SiC (Silicon Carbide) DPF, in addition to the Cordierite-DPF which has been in commercial production since 1989. This investment is being made to meet the customers’ demand for samples and commercial products of the newly developed SiC-DPF until larger-scale mass production begins. NGK will invest Yen 1.5 billion at its Komaki Plant (Komaki, Aichi) to build production lines with a production capacity up to 200,000 pieces per year. Production is available starting in April 2002 and capacity will be increased up to 200,000 pieces by October 2002. The market for SiC-DPF is estimated to grow to approximately Yen 25 billion by 2005. NGK plans to make further investment in larger-scale mass production facilities to meet potential demand in Europe, the leading market for diesel-powered vehicles. SiC is superior to Cordierite in heat resistance, but its thermal expansion is larger and it is more expensive than Cordierite. NGK’s newly developed SiC-DPF has solved the thermal expansion problem with its original sintering technology and segmented design, and has achieved high reliability and mass productivity. Cordierite has been widely used as the material of HONEYCERAM(R), ceramic honeycomb substrates for automotive exhaust catalytic converters. Since 1976, NGK has produced and delivered more than 450 million pieces of HONEYCERAM(R) to car manufacturers all over the world. By utilizing its accumulated technologies and know-how through production of HONEYCERAM(R), NGK will commercialize these two kinds of DPF for various diesel emission control technologies and deliver widely to car manufacturers worldwide. | 
