1. Taiwan Adhesive Industry: Recent Market Trend and Technology Development Taiwan Synthetic Resins & Adhesive Industrial Association Chairman Jerry Liao

2. Outline • Introduction • Overview of Taiwan adhesive market • Quick glance of Taiwan Market. • Market & Technology trends in Taiwan. • Laws & regulations update relevant to Taiwan adhesive Industry • Conclusion 2

3. Market Sale Volumes of Taiwan Adhesives (↑21.2%) (↑11.4%) Sales (Unit in ton) Sales ( Million NT$)

4. Material Tonnage Sales % (As of Total Taiwanese Adhesives)

5. Major Applications of Different Adhesives in Taiwan Source: Taiwan Synthetic Resin & Adhesives Industrial Association (2010/05)

6. Import & Export Sale Data of Taiwan Adhesive Industry (↑50.7%) (↑37%)

7. Quick Glance of Recent Market Taiwan adhesive industry: Produce 368 Thousand Tons in 2010. (↑11.4% compared with 09) Create sales of NT$ 26.4 billion in 2010 (↑21.2% compared with 09) Traditional adhesives appear reaching maturity in Taiwan evidenced by flat growth rates and fluctuating sales-volumes coinciding with economic cycles. In 2011, the market growth should continue but at a much lower rate as compared to that of 2010. Taiwan imported 36.8 thousand tons of adhesives in 2010 (↑50.7% compared with 09), and most of items are high performance and high prices products.

8. Development of Environmental Friendly Products and Technologies in Taiwan • Solvent-borne Resin - Solvent content>50wt% - Tin, e.g. heavy metal content - Formaldehyde contented Develop green adhesives • High solid Resin - Solid content>60wt% • Water based resin - VOC<25 (v/v)% - Residue monomer<0.1(wt)% • UV Curable resin - Solvent content <10% • Formaldehyde<0.5% • Tin free VOC Toxicity • 100% Solid resin/Reactive hot melt - no VOC • Water base resin - VOC<5(v/v)% - Residue monomer<500ppm • UV Curable resin - Solvent free • High BRC (Bio-Renewable Carbon) Resin • Formaldehyde<0.2% or Formaldehyde free • Heavy Metal free • BPA free Reduce toxic materials in adhesives Future Past Present 8 10/28/2011

9. New Adhesive Product Development in Taiwan ˙Tailor-made design ˙Innovative product Price Function Market oriented production ˙Functional coating -IC packaging/LCD process materials -3C adhesive -IR Cut/conductive materials -Self-clean/anti-bacterial materials * Durable outdoor coating Food packaging ˙High performance coating -Industrial coating -Packaging Application ˙Architecture coating ˙Hybrid materials ˙High purity/electronic grade materials˙Functionalization ˙nano-materials/particles * Functionized bio-polymer ˙Two pack resins˙Copolymer˙Blend materials ˙Homopolymer or copolymer technology Past Future Present • Development of high performance / value- added products • More globalization to enhance market size Underlining Technology 9 10/28/2011 Sources：ITRI-TCSI(2007/12) ; ITRI-MCL(2008/01)

10. Conclusion : Outlook of Taiwan Adhesive Market • ECFA has accelerated Taiwan adhesive and associatedindustries’ step toward globalization. • More adhesive companies are now focusing on green and high performance adhesives, such as waterborne PU, silicones, specialty epoxies and hybrid oriented products to compete in global market. • Development of carbon footprint adhesives based on renewable materials has started, but it is still in infancy. • With possible downturn of economic prospect in Euro Area & USA, Taiwan adhesive market prospect in 2012 seems gloomy, especially on 3C applications. 10 10/28/2011

11. Update New Laws and Regulations on Environmental Protection & Plant Safety in Taiwan 11

12. New Environmental Regulation-1 12

13. New Environmental Regulation-2 13

14. New Environmental Regulation-3 14

15. New Environmental Regulation-4 15

16. New Environmental Regulation-5 16

17. Safety and Health Regulations-1 17

18. Safety and Health Regulations-2 18

19. Safety and Health Regulations-3 19

20. Safety and Health Regulations-4 20

21. Summary in Law & Regulations EIA (Environmental Impact Assessment) process makes manufacturers more tedious to establish new adhesive production facilities in Taiwan than before. New environmental regulations of manufacturing would raise the cost of products in Taiwan. Stricter Control of all toxic materials reflects high public concerns on Health/Safety of workers & consumers. – also implies raising cost. 21

22. Thank You for Your Attention Taiwan Synthetic Resins & AdhesivesIndustrial Association Address:3F.-6, No.14, Ln. 609, Sec. 5, Chongxin Rd., Sanchong Dist., New Taipei City 241, Taiwan (R.O.C.) Phone:886-2-29998788 Fax: 886-2-29990380 E-mail: adhesive@ms39.hinet.net 22

23. Appendices