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[FY2003 1Q Performance Briefing]HDD Head Business Outlook

Takehiro Kamigama General Manager Data Storage Components Business Group

Takehiro Kamigama
General Manager
Data Storage Components Business Group

[ Slide 1,2 ]

Firstly, I would like to look at net sales in the HDD head business for the first quarter of fiscal 2003, and outline our first-half and full-year net sales projections. The HDD head business achieved first-quarter net sales of ¥38.3 billion, slightly exceeding our target of ¥38.2 billion. Projections for first-half net sales have been revised downward from ¥74.8 billion, to ¥74.4 billion, while projections for full-year net sales have been raised from ¥146.9 billion, to ¥150.0 billion.

[ Slide 3 ]

Secondly, I would like to give a brief overview of aggregate demand for HDD heads and TDK's market share. Although our projections remain almost unchanged, we expect to see a slight dip in demand for HDDs in line with declining demand for PCs. Head demand, however, will remain steady due to expected delays in full-scale production of 80GB/P HDDs, and continuing strong demand for 40GB/P HDD heads.

Since our last announcement in May, there has been no major change in the average number of heads per disk at about 2.5. The precise figure was 2.53, slightly above our projection of 2.51, however. We see this rise as a result of the delay in full-scale production of 80GB/P HDDs. Consequently, TDK's market share edged up from 29%, to 30%.

[ Slide 4 ]

Finally, I would like to look at our product-launch schedule for HDD heads, including an update on the certification status for products by 3.5-inch platter capacity. With the situation fundamentally the same as we explained in the fiscal 2002 earnings release announcement, I would just like to outline the latest developments.

Mass production of 60GB/P HDD heads began according to schedule, and we expect to ease up the pace of production in around August.

Our 80GB/P HDD heads are currently undergoing certification, with certification for some models already obtained and others still in progress. Regarding schedules for the start of mass production, in niche heads and drives, we expect production of HDDs equipped with single HGAs to begin in September as planned. This product employs a single 80GB/P HGA (using a single-face only) to yield a capacity of 40GB per drive. However, production of drives equipped with multiple heads will not begin until late 2002, and certain models will be pushed back into early 2003. In particular, delays in the production of 7,200-rpm drives seem unavoidable at present. TDK has begun shipping samples of TMR heads, the mainstream technology for 120GB/P heads.