Mr. Atsuo Kobayashi
Data Storage & Thin Film Technology Components Business Group
I'm Atsuo Kobayashi, General Manager of TDK's HDD head business. I would like to report briefly on this group's results.
On March 15, 2007, TDK signed a basic agreement with Alps Electric Co. Ltd. regarding acquisition of HDD head-related assets. We are now in negotiations toward concluding an official agreement with this company. Please understand that because the details of this agreement are still being worked out we can't answer every question you may have in this regard during the question-and-answer session later in today's earnings release conference. Further, our forecasts for the current fiscal year are premised on TDK remaining in competition with Alps Electric.
Now I'd like to report on our fiscal 2007 sales and sales forecasts for fiscal 2008. In fiscal 2007, we recorded sales of ¥304.8 billion, with ¥154.0 billion recorded in the first half and ¥150.8 billion in the second half. The average exchange rate was ¥117 to the U.S. dollar. For fiscal 2008, we are projecting sales of ¥293.2 billion, ¥135.2 billion in the first half and ¥158.0 billion in the second half. The full-year forecast is down approximately 4% from fiscal 2007. Our forecasts assume an exchange rate of ¥110 to the U.S. dollar.
Next I would like to look at total HDD head demand and TDK's market share. Total HDD head demand in fiscal 2007 was 440 million units, the number of heads per HDD was 2.9 and total HGA demand was 1.3 billion units. We estimate that our market share was 31%. For fiscal 2008, we are forecasting total HDD head demand of around 500 million units. Our forecast for the average number of heads per HDD is 2.8 and for total HGA demand it is 1.4 billion units. We expect our market share to remain at 31%.
My final subject is our schedule for introducing new HDD heads. I will present our product launch schedule in terms of three categories: 3.5-inch, 2.5-inch and 1.8-inch HDDs. In products for 3.5-inch drives, we have already started mass production of 250GB/P products. With 334GB/P heads for 3.5-inch HDDs, which provide a capacity of 1 terabyte with 3 disks, we plan to begin mass production around summer this year. Turning to heads for 2.5-inch HDDs, we are already mass producing 120GB/P products and expect to start mass production of 160GB/P products as early as possible. As this slide shows, there will be a very gradual increase in mass production, which highlights the different speeds at which customers are developing products. In the 1.8-inch drive category, we are already mass producing 60GB/P products. Where 80GB/P products are concerned, some customers have been quick to launch products, whilst others won't start launching products until the second half of the year. TDK is intent on supplying optimal products for all customers.
That concludes my presentation. Thank you.