Investor Relations | IR Events | Performance Briefing

[Financial Results for Fiscal 2003 Performance Briefing]HDD Head Business Outlook

Mr. Koichi Nakano Deputy General Manager Data Storage & Thin Film Technology Components Business Group

Mr. Koichi Nakano
Deputy General Manager
Data Storage & Thin Film Technology Components Business Group

I would like to give an overview of how the business performed during fiscal 2003.

Firstly, as outlined by President Sawabe, net sales for fiscal 2003 increased ¥29.0 billion, or 20%, to ¥176.0 billion. First-half sales were ¥78.2 billion and second-half sales were ¥97.8 billion. Fiscal 2003 net sales came in ¥2.2 billion higher than the ¥173.8 billion we forecast at the third-quarter earnings conference on February 5 this year. Most of this increase was accounted for by HDD heads.

Looking at projections for fiscal 2004, we are forecasting net sales for the full year of ¥184.2 billion, with ¥91.2 billion expected in the first half. As touched on earlier by the president, orders have been extremely strong lately. That being the case, we may even exceed our first-half target of ¥91.2 billion.

Next, I would like to look at aggregate demand for HDD heads and TDK's market share. In fiscal 2002, PC demand was 126 million units and HDD demand was 194 million units. The number of heads per HDD was 2.7. As a result, aggregate HGA demand was 521 million units. TDK's market share stood at 23%.

In fiscal 2003, PC demand increased by 2% to 128 million units. HDD demand climbed 13% to 220 million units. The number of HGA heads per HDD was 2.7, with the same as fiscal 2002. Aggregate HGA demand rose 12% to 584 million units. TDK captured a market share of 30%.

TDK's market share in the fourth quarter of fiscal 2003 was 33%, slightly higher than the full-year average of 30%.

In fiscal 2004, we project that PC demand will rise 3% to 132 million units and HDD demand will increase 9% to 240 million units. The number of HGA heads per HDD is projected to decrease slightly to 2.5. This projection is predicated on the start of full-scale mass production of 80GB/P heads. As a result, in fiscal 2004 TDK forecasts aggregate HGA demand of 600 million units, a year-on-year increase of 3%, and aims to hold down a market share of 33% during the year. One important trend is that demand for HDDs is now growing at a faster pace than demand for PCs. This is an encouraging sign, suggesting that HDDs are now finally finding a home in non-PC applications, notably car navigation systems, video game consoles and HDD recorders.

I would now like to look at our schedule for launching new products. HDD manufacturers have already launched mass production of 80GB HDDs this year. In response, we have been moving quickly to shift production to 80GB/P heads. 80GB/P products will account for the vast majority of our lineup by May/June 2003.

Let me now discuss next-generation 120GB/P products with 3.5-inch platter capacity. HDD manufacturers are now certifying these products. We plan to begin mass production in the fourth quarter of fiscal 2004, in line with the plans of HDD manufacturers, which suggest that certification will be completed before the end of 2003. However, as part of their product strategies, HDD manufacturers are looking to extend the product life of 80GB HDDs. We therefore expect a longer product life for 80GB HDDs. This may slightly delay the start of mass production of 120GB/P heads. Nevertheless, as shown on the chart, our goal remains to obtain certification by the end of 2003 in preparation for mass production. We hope to supply GMR heads for use in 120GB HDDs for 3.5-inch desktop models. As previously announced, we plan to supply TDK-developed TMR heads for use in 2.5-inch drives, as well as for smaller drives for mobile applications.

That concludes my presentation. Thank you.

Recommendations

  •  
  •  
  •