[ Financial Results for Fiscal 2005 Performance Briefing ]HDD Head Business Outlook

Mr. Takehiro Kamigama
Director
Executive Vice President
General Manager
Data Storage & Thin Film Technology Components Business Group

I'm Takehiro Kamigama, general manager in charge of TDK's head business. I would like to report briefly on this group's results for fiscal 2005.

Net sales were ¥103.3 billion in the first half and ¥131.3 billion in the second half. Previously, we forecast second-half net sales of ¥126.6 billion. Overall, net sales for fiscal 2005 were ¥234.6 billion. For fiscal 2006, we are projecting net sales of ¥254.0 billion, with ¥120.8 billion in the first half and ¥133.2 billion in the second.

Next, let's look briefly at TDK's HDD head market share. As Mr. Sawabe reported earlier, our market share dropped to an average of 31% due to Western Digital's decision to produce heads in-house. For fiscal 2006, we are projecting a market share of 34%, based in part on receiving more orders from captive head manufacturers.

Finally, I'd like to talk about the qualification status of new products for 3.5-inch and 2.5-inch HDDs.

160GB/P products for 3.5-inch HDDs are currently undergoing qualification. We expect to start production around the end of this year. We will use TMR for these products. Regarding 60GB/P products for 2.5-inch HDDs, we have already started medium-volume production. However, actual volume production probably won't start until around May or June. Previously, we had reported it would be January or February. This slight delay is due to time needed for qualification by customers.

This completes my brief report on HDD head operations.