Dexerials Invests in German Design House SemsoTec Group Forming Capital and Business Alliance to Expand European Automotive Business

Dexerials Corporation (TOKYO:4980) (Head office: Shimotsuke city, Tochigi Prefecture; Representative Director and President: Yoshihisa Shinya; hereinafter the "Company") is pleased to announce that it has invested in and entered into a capital and business alliance with SemsoTec Group (hereinafter "SemsoTec"), a corporate group centered around the German automotive design house SemsoTec Holding GmbH (Head office: Garching bei Munich, Germany; Founder and Managing Director: Jochen Semmelbauer), with a view toward the establishment of a stronger partnership and business collaboration with the Company.
As of October 1, 2024, the Company has completed its investment of eight million euros (approximately 1.3 billion yen) in two subsidiaries under SemsoTec Holding GmbH, and the two companies have become equity method affiliates.

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Dexerials Corporation: Kentaro Oshima, Executive Officer, Automotive Solutions Business Unit Head (Photo: Business Wire)

The Company, which began operating in 2012^*1 develops, manufactures, and distributes electronic components, adhesive materials, optical materials, and other functional materials that are indispensable in smartphones, laptops, and other electronic devices, as well as in automobiles, which are increasingly becoming electronic. The Company operates eight manufacturing and sales locations in Japan (including those of its subsidiaries) and twelve overseas. SemsoTec is a display and touch oriented engineering, development and integration provider for complex HMI^*2 (Human Machine Interface) units for a variety of industries such as the automotive, smart home and high-end consumer goods industries. It has an extensive customer base, mainly in Europe.

The two companies began communicating in 2017, and since the start of their collaboration in October 2020,^*3 SemsoTec has been considering incorporating our optical elastic resin (SVR) into suitable designs, mostly in-vehicle displays, and SemsoTec has proposed material and technical solutions to automakers and customers working on in-vehicle displays. In addition, in October 2023, the Company introduced coating and lamination equipment for large, curved, and irregularly shaped displays, a new trend in in-vehicle displays, at SemsoTec's Optical Solutions Center,^*4 and have been working with multiple customers to prototype, evaluate, and consider products using our materials and this equipment. Through SemsoTec, the Company has steadily increased its presence in Germany, the source of automotive design trends.

The purpose of this capital and business alliance is to deepen the partnership and business collaboration between the two companies and accelerate the growth of business. In "Expanding business in the growth domain," one of the basic policies of the Mid-term Management Plan^*5 announced in May 2024, the Company sets a sales target of 30 billion yen for the automotive business in fiscal 2028, more than double the current level, and is working to expand its sales network in overseas markets as one of our key priorities. With support from the Company, SemsoTec will work to extend and strengthen its marketing function and production system to expand its business.
Through the strong relationship between the two companies, Dexerials will increase our presence in the European automotive industry, and by utilizing SemsoTec's large customer base, mainly in Europe, the Company will jointly carry out design-in^*6 activities for OEM manufacturers and propose materials and solutions to tier 1 manufacturers. Furthermore, by jointly carrying out spec-in activities^*7 for the display manufacturers of major second-tier suppliers in Asia, we aim to create new business opportunities not only in Europe but also in the Asian market.

The Company aims to contribute to the realization of a sustainable society, achieve sustainable growth and increase its corporate value by establishing stronger and smoother collaboration with SemsoTec, which has deep knowledge and a network in the European industrial and automotive business, and by providing high-value-added products, technologies and solutions that are essential for the evolution of digital technology that helps resolve social issues.

1. Overview of this capital and business alliance

• Partner company: SemsoTec Holding GmbH
• Investee companies: (1) SemsoTec GmbH, (2) SemsoTec Engineering Services and Product GmbH
• Contract date: October 1, 2024
• Amount invested: 8,000,000 euros

2. Contents of the capital and business alliance

The purpose of this transaction is to deepen the partnership and business collaboration between the two companies and accelerate the growth of business. The two companies aim to achieve greater growth in the automotive business and the non-Automotive business and expand our business in Europe.

• Combine SemsoTec's cutting-edge display design and integration capabilities for automobiles with Dexerials' materials and process integration using process technology to create reliable and quality proven solutions.
• Establish a collaboration that contributes to the growth of both companies' businesses.
• Leverage SemsoTec's strong customer base, mainly in Europe, to jointly provide design-in activities to OEM manufacturers, as well as, proposing materials and solutions to tier 1 manufacturers.
• Create new business opportunities not only in Europe but also in the Asian market by carrying out spec-in activities for the display manufacturers of major second-tier suppliers in Asia

3. Statement from a representative

Dexerials Corporation
Kentaro Oshima, Executive Officer, Automotive Solutions Business Unit Head
Dexerials and SemsoTec began communicating in 2017 and began collaborating on automotive-related business in 2020. Amid the significant technological trend towards the electrification of vehicles and advancement of autonomous vehicles, Dexerials and SemsoTec have been actively proposing Dexerials’ materials and technical solutions, primarily to European customers. Through this capital and business alliance, we aim not only to expand our automotive business by leveraging each other’s strengths but also to support human resources and expand new businesses, thereby ensuring the sustainable growth of both companies without limiting each other’s growth potential. Dexerials handles high-quality functional materials backed by unique technology and aims to solve social issues through materials innovation and the provision of solutions. Dexerials will continue to provide in-vehicle display and sensing solutions globally, contributing to the evolution of automobiles.

SemsoTec Group
Jochen Semmelbauer, Founder and Managing Director
SemsoTec is known among its customers for independent and technically mature consulting in the field of modern HMI systems. In the automotive segment in particular, but also in the smart home application, medical and marine monitor, and EV charging segments, SemsoTec has been relying on a particularly wide range of materials, processes and technologies for many years. The focus is always on efficient, high-quality solutions that are ideally tailored to the specific end application, ranging from component selection to serial production. The company believes that one of the most important criteria for quality is the local availability of the latest verified technologies. In 2023, the new Optical Solutions Center was established at the production site in Cham, Germany in cooperation with Dexerials. Here, special solutions for touch display requirements, such as the need for displaces to be curved or have a special shape or use FOG bonding, can now be implemented using bonding materials and technologies that have been used successfully for many years. At the same time, this also provides opportunities to extensively test and verify the materials used. Small batches, special samples and -if desired- customer processes for serial production can also be implemented here. The cooperation between Dexerials and SemsoTec is therefore a valuable and solid partnership for both companies and both companies hope not only to establish new markets from it, but also increase customer loyalty and customer satisfaction.

4. Company Profile

Dexerials Corporation
Dexerials develops, manufactures, and distributes electronic parts, adhesive materials, optical materials, and other functional materials that are indispensable in smartphones, laptops and other electronic devices, as well as in automobiles, which are increasingly becoming electronic. As a starting point for fostering growth and achieving a sustainable society, Dexerials established its new five-year Mid-term Management Plan in May 2024, under its Purpose, Empower Evolution. Connect People and Technology, as explained in the relevant section of its website (Corporate Philosophy, Vision and Purpose).

SemsoTec Group
SemsoTec Group, centered around SemsoTec Holding GmbH, is a corporate group engaged in the research and development of HMI and display solutions, specializing in the design of in-vehicle displays installed in automobile dashboards and creating concepts for the entire driver's seat. With extensive knowledge of the improvement of visibility, the company is involved in the development of display production process technologies and sample sales.

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