Mr. Takaya Ishigaki
Senior Vice President
Capacitors Business Group
I'm Takaya Ishigaki of TDK's Capacitors Business Group. Today, I would like to report on the capacitor business. In fiscal 2008, capacitor demand held firm through the end of the first half. From around the end of 2007, however, the supply-demand balance began to change, leading to an easing in tight supplies. In this market, TDK expanded production capacity in the first half of fiscal 2008 in response to demand growth through that period. However, our response was too slow, with the speed of the shift to high- and large-capacitance products taking us by surprise. Specifically, on a volume basis, TDK grew sales of high- and large-capacitance products by more than 20% year on year. However, this increase was lower than our competitors. Excluding the effect of forex movements, the average sales price in fiscal 2008 was about 6% lower year on year.
The key theme for us in fiscal 2009 will be to enhance our business infrastructure. Our most important task in this context is to get the Honjo factory up and running. Integrated processes will raise production efficiency and enable us to lift quality and pursue cost efficiency too. In terms of our outlook for demand, while I think some impact from macroeconomic conditions is unavoidable, demand for key finished products is likely to grow. We foresee growth in flat-panel TVs, mobile phones and PC-related areas, for example. We are also assuming that the increasing use of electronics in automobiles to help conserve energy and make vehicles more environmentally friendly, and expected continued growth in emerging markets will underpin firm demand for electronic components. Excluding the effect of forex movements, we expect prices to fall less than 10% but more than 5%.
Let me report on the launch schedule for the new Honjo factory. The factory was completed on schedule at the end of March this year, and equipment installation is also proceeding as planned. We plan to move into mass production, taking a cautious approach based on demand in the first half, that is, from now through the end of September. Basically, we will follow our plan for mass production.
The market for capacitors saw a seasonal decrease in demand during the January-to-March quarter. By the same token, though, there should be a seasonal recovery in demand in the second quarter of 2008. That said, the recovery appears somewhat weaker than in previous years.
That concludes my presentation. Thank you.