Showa Denko K.K. (SDK) and Air Water Inc. (AWI) have agreed to establish a joint venture for the production of specialty material gases for the electronics industry.

Due to be established next month in Tokyo, Japan, the new company named Showa Denko Air Water Co., Ltd. will be capitalised at JPY 100m ($120m). It will be 51% owned by SDK and 49% by AWI.

Demand for specialty material gases has steadily been growing, centering on Asian markets, for use in the production of solar cells, semiconductors, LCD panels, and LEDs. Due to increasing needs for high-quality, functional, energy-saving and compact electronic devices, manufacturers of specialty material gases are now required to develop new products and make further capital investments.

These factors have led SDK and AWI to form a partial alliance in the areas of advanced, innovative, and eco-friendly specialty material gases that can be marketed globally.

SDK and AWI will establish an effective production system at the new manufacturing joint venture and launch a wide variety of new material gases, fully utilising their proprietary technologies. SDK and AWI will take the products from the joint venture and sell them independently through respective sales channels.

As a first step, the JV will install a 40 tpy hydrogen selenide (H2Se) production facility within the premises of SDK's Tokuyama Plant in Shunan City, Yamaguchi Prefecture, Japan. H2Se is used for forming light-absorbing films in copper indium gallium diselenide (CIGS) compound-semiconductor-based solar cells.

Production start-up for H2Se is slated for June 2011. CIGS-type solar cells are forecast to be used widely for large-scale photovoltaic power generation because their theoretical conversion efficiency is almost equal to that of polycrystalline-silicon-type solar cells.

SDK and AWI will aim to quickly strengthen their joint operations, pursuing the possibility of expanding the JV's product lines and establishing plants at best locations inside and outside Japan.