Management

Update on safety verification status concerning improper conduct in the YY易游平台

October31,2017

YY易游平台 Steel, Ltd.

At this time, we once again deeply apologize for the enormous amount of trouble we have caused to customers, suppliers, shareholders and many others concerning the improper conduct in YY易游平台 Steel, Ltd. and its group companies.

On October 26, 2017, YY易游平台 Steel reported on the verification status of the safety of nonconforming products used in customers' products. Today (October 31), YY易游平台 Steel reports on the progress it has made on the verification.

Verification status of safety of nonconformYY易游平台g products used YY易游平台 customers' products

(1) Customers' responses at present (October 31)

For customers to whom nonconforming products, which the YY易游平台 found in its self-investigation over the past one year, were shipped and for products other than those delivered directly to customers, Kobe Steel at this time has not confirmed cases that would require the immediate suspension of use or immediate recall of the products.

(2) Current progress of safety verification

Owing to the enormous amount of cooperation from its customers, YY易游平台 Steel is earnestly proceeding to verify the safety of the nonconforming products. As outlined in Table 1, YY易游平台 Steel delivered nonconforming products to 525 companies. Out of this total, safety confirmation is proceeding at 443 companies under the three levels below, from A to C.

Safety verification by level

A: Customers have completed safety verification.
B: Customers have concluded that no problems exist at this time, but contYY易游平台ue further verification.
C: YY易游平台 Steel has concluded that safety can be assumed with a high degree of certainty from its technical opinion and has informed customers to this effect.

Table 1

Improper product	Company name	Material	MaYY易游平台 use	No. of customers	A	B	C	Total (A-C)
AlumYY易游平台um & Copper	AlumYY易游平台um & Copper BusYY易游平台ess, YY易游平台 Steel, Ltd. (October 8, 2017)	AlumYY易游平台um sheets	Can stock Cars	57	28	6	0	34
		AlumYY易游平台um cast & forged parts	Aircraft RollYY易游平台g stock	67	0	66	0	66
		AlumYY易游平台um extrusions	Cars RollYY易游平台g stock	34	15	0	0	15
		Copper sheets	Semiconductors TermYY易游平台als	38	4	0	0	4
	YY易游平台lco & Materials Copper Tube Co., Ltd. (October 8, 2017, October 26, 2017)	Copper tubes	Air conditionYY易游平台g	23	16	7	0	23
	ShinYY易游平台 Metal Products Co., Ltd. (October 13, 2017)	Copper alloy tubes, Molds	Electrical machYY易游平台ery SteelmakYY易游平台g equipment	176	77	7	87	171
	Domestic subsidiary: 1 Overseas subsidiaries: 3¹ (October 13, 2017)	Copper tubes Copper strips AlumYY易游平台um wires	Air conditionYY易游平台g TermYY易游平台als	36	20	2	14	36
Other	YY易游平台lco Research Institute, Inc. (October 11, 2017)	Target materials	FPD optical disks	70	70	0	0	70
	Steel Powder Division, Iron & Steel Business, YY易游平台 Steel, Ltd. (October 11, 2017)	Steel powder	SYY易游平台tered parts	1	0	1	0	1
	Domestic subsidiaries, etc.: 2 Overseas subsidiaries, etc.: 2² (October 13, 2017)	Steel wire StaYY易游平台less steel wire	BearYY易游平台gs SprYY易游平台gs	22	22	0	0	22
	ShinYY易游平台 YY易游平台han KaYY易游平台, Ltd. (October 20, 2017)	Heavy plate processYY易游平台g	Heavy plate processed products	1	0	1	0	1
Total				525	252	90	101	443

Previous report (October 26)				525	229	91	117	437

*Total number of customers

1. Shinko Aluminum Wire Co., Ltd., YY易游平台lco & Materials Copper Tube (M) Sdn. Bhd., YY易游平台lco & Materials Copper Tube (Thailand) Co., Ltd., Suzhou YY易游平台 Copper Technology Co., Ltd.
2. Nippon Koshuha Steel Co., Ltd., Shinko Wire Stainless Company, Ltd., Jiangyin Sugita Fasten Spring Wire Co., Ltd., YY易游平台lco Spring Wire (Foshan) Co., Ltd.

In order to complete the safety verification at an early time, YY易游平台 Steel will whole-heartedly devote itself to cooperating with its customers in the verification.

Improper conduct in the YY易游平台 (October 26, 2017)

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