Mr. Atsuo Kobayashi
Data Storage & Thin Film Technology Components Business Group
I'm Atsuo Kobayashi, General Manager of TDK's HDD head business. I'd like to report briefly on this group's results.
As I explained at our previous earnings release conference on May 15, I may be unable to answer every question you have regarding the acquisition of HDD head-related assets from Alps Electric Co. Ltd. and future business results because negotiations are still in progress toward reaching an official agreement.
I'd now like to report on HDD head results for the first quarter of fiscal 2008 and the outlook for the interim period and full year.
Sales in the first quarter were ¥70.4 billion, down 5% year on year. While sales volume rose around 16%, severe sales price discounts of 19%, coupled with the effects of foreign currency fluctuations and changes in our product mix, resulted in the 5% year-on-year decline.
In spite of this, we have raised our sales forecast for the first half of the current fiscal year from ¥135.2 billion to ¥146.4 billion based on an expected increase in sales volume from the second quarter. For the second half, whereas previously we forecast ¥158.0 billion, now we are forecasting a slightly lower figure of ¥152.6 billion. This is because, while demand is expected to remain strong through the third quarter, there are uncertainties in the fourth quarter. For the full year, however, we have raised our projected net sales from ¥293.2 billion previously to ¥299.0 billion, an increase of around ¥6.0 billion.
There has been no change to our previous estimates for HDD head demand and TDK's market share. HDD demand is still estimated at 500 million units, with an average number of heads per HDD of 2.8 and HGA demand of 1,427 million units. And we are still projecting a market share of 31%.
Similarly, there has been no change to our schedule for launching new products from the previous earnings release conference. We have announced the commencement of mass production of 334GB/P products for 3.5-inch HDDs. Furthermore, we expect customer migration from 120GB/P to 160GB/P products for 2.5-inch HDDs and from 60GB/P to 80GB/P products for 1.8-inch HDDs.
That concludes my presentation.