Showa Denko Introduces AI System to Examine Capital Investment

TOKYO, Feb 6, 2020 - (JCN Newswire) - Showa Denko K.K. (SDK; TSE:4004) has introduced an artificial intelligence (AI) based search system to look efficiently for information useful for capital investment evaluation from the company's knowledge databases. This new search engine uses an AI system named "KIBIT*," which was developed by FRONTEO, Inc., and searches the company's document database for knowledge useful for its internal examination and screening of investment plans including those for production equipment. SDK started operation of the new system at the end of this January.

When SDK judges eligibility of investment plans including those to establish, maintain or renew production facilities, we do so in accordance with valuation standards based on the company's past experiences on judgment about many factors of investment plans including their financial returns, contribution to safe and stable operation of plants. When we examine investment plans from the viewpoints of appropriateness of production technology and engineering, we utilize our know-how accumulated through judgment on more than 2,000 cases of investment in the past 20 years. However, it was not easy for us to find appropriate cases to refer from our document files recorded on multiple databases with conventional search engine that relies on simple key word search. In addition, judgment on similarity of investment cases relied on past experiences of examiners. Therefore, it was very difficult for us to make the most of our accumulated data and know-how about judgment on investment plans. This time, SDK decided to introduce a new AI-based search system to scrutinize our database, aiming to make better use of our knowledge about safe and stable operation of production facilities accumulated through judgments on investment plans in the past.

KIBIT is an AI which simulates "tacit knowledge" held by experts and skilled workers. In order to search databases for cases appropriate to refer, this AI looks up not only key words but also structure of writing and the line of thought in documents on databases, including those in documents contained in attached files. SDK decided to introduce KIBIT-based search engine because this system enables us to extract cases of investment similar to newly suggested investment plans under screening not reliant on examiners' experiences. In a trial run of the new system conducted in SDK, we confirmed that the KIBIT-based system searched our document databases for similar cases of investment and judged degrees of similarity within almost one tenth of the time needed by conventional search systems. In addition, the KIBIT-based system enables us to pick up many similar cases simultaneously, and make the most of our knowledge and know-how about facility safety measures. SDK will put this new search system into regular use in its process to judge appropriateness of capital investment plans, and consider to extend the use of the new search system to cover search for similar cases of accidents and abnormalities in production fields.

Under its medium-term business plan "The TOP 2021," the Showa Denko Group has been promoting "Strengthening of its power to utilize AI/IoT." The Group will continue to promote use of AI/IOT in production fields, and strengthen the Group's power to maintain safe and stable operation of plants and competitiveness of its businesses.

Note: *An artificial intelligence originally developed by FRONTEO, Inc. This AI is equipped with FRONTEO's original mechanical learning algorithm and powerful natural-language processing technology. It can learn deeply from small amount of teaching data, and conduct high precision analysis of database in a short time.

About Showa Denko K.K.

Showa Denko K.K. (SDK; TSE:4004, ADR:SHWDY), a major manufacturer of chemical products, serves a wide range of fields from heavy industry to electronics and computer industries. The Petrochemicals Sector provides cracker products such as ethylene and propylene, the Chemicals Sector provides industrial, high-performance and high-purity gases and chemicals for semicon and other industries, and the Inorganics Sector provides ceramic products, such as alumina, abrasives, refractory and graphite electrodes and fine carbon products. The Aluminum Sector provides aluminum materials and high-value-added fabricated aluminum, the Electronics Sector provides HD media, compound semiconductors such as ultra high-bright LEDs and rare earth magnetic alloys, and the Advanced Battery Materials Department (ABM) provides lithium-ion battery components. For more information, please visit www.sdk.co.jp/english/.

Contact:Showa Denko K.K., Public Relations Office, Tel: 81-3-5470-3235

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