[ 3rd Quarter of fiscal 2007 Performance Briefing ]HDD Head Business Outlook

Mr. Atsuo Kobayashi
Deputy General Manager
Data Storage & Thin Film Technology Components Business Group

I'm Atsuo Kobayashi, Deputy General Manager of TDK's HDD head business. I would like to report briefly on this group's results.

Let me start with fiscal 2007 third-quarter sales and full-year forecasts. Sales in the third quarter were ¥76.8 billion. For the fourth quarter, we are projecting sales of ¥71.3 billion, so our forecast for the second half is ¥148.1 billion. This represents an approximate 6% increase on our previous forecast in October last year of ¥139.0 billion. For the full year then, we are forecasting head sales of ¥302.1 billion compared with our previous forecast of ¥293.0 billion.

Next I would like to look at HDD head demand and TDK's market share. We have raised our previous forecast for HDD head demand slightly to 440 million units. Our forecast for the average number of heads per HDD is unchanged at 2.9. HGA demand is forecast to increase to 1,292 million units. In terms of TDK's market share there is no change to our previous forecast, at 31%, as sales are expected to rise in line with increased demand.

The final subject I would like to cover is our schedule for introducing new HDD heads. This time I would like to present our schedule in terms of three categories-3.5-inch, 2.5-inch and 1.8-inch HDDs. Starting with the smallest capacity in each category, mass production of 60GB/P products for 1.8-inch HDDs, 120GB/P products for 2.5-inch HDDs and 250GB/P products for 3.5-inch HDDs is expected to start in the first half of 2007. Regarding the next capacity line in each category, qualification activities are already underway with respect to 80GB/P heads for 1.8-inch HDDs, 160GB/P heads for 2.5-inch HDDs, and 334GB/P (330GB/P class) heads for 3.5-inch HDDs. Regarding the exact schedule for mass production, because the trend is toward perpendicular magnetic recording, we are engaging in activities so as to begin mass production as soon as possible. This includes working on issues involving head-media interaction.

That concludes my presentation. Thank you.