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[ Financial Results for Fiscal 2008 Performance Briefing ]Power Systems Business Outlook

Mr. Takeo Suzuki Senior Vice President General Manager Power Systems Business Group

Mr. Takeo Suzuki
Senior Vice President
General Manager
Power Systems Business Group

I'm Takeo Suzuki and I've been in charge of the power systems business since April 1 this year.

I would like to begin by looking back on the switching power supply (SPS) segment in the past fiscal year. The global market saw growth of between 4% and 5%. TDK, however, saw lackluster results in Japan due to sluggishness in the semiconductor sector, particularly back-end processes. Overseas, where we acquired the Lambda Americas and Europe groups in Europe and North America in January 2006, markets grew steadily, supporting 10% growth in our operations. In addition, ERP(Enterprise Resource Plannning) deployment will be fully completed in Europe and North America in May this year. China, meanwhile, continues to grow steadily thanks to production in Wuxi and efforts to bolster sales domestically. In regards to the secure power (SP) segment, namely uninterruptible power supplies (UPS) and engine generators, conditions worldwide are flat and a shift to smaller products is under way. One example is ELTEK's direct current power systems. Small UPS powered by lithium-ion batteries are being trialed for new generation networks, but a delay in launching new products has hampered growth somewhat.

Next, let me talk about key initiatives planned for fiscal 2009. Densei-Lambda became a wholly owned subsidiary of TDK in March 2008 following its delisting on February 25. TDK now aims to integrate TDK's power systems business with Densei-Lambda by October 1 this year, by transferring the former to the latter. Plans call for the integrated business to begin operations on October 1 as TDK-Lambda. To this end, actions are being taken now to integrate R&D resources, optimize manufacturing locations and reinforce sales forces. Our target is to generate sales of ¥100 billion in the year ending March 31, 2010. Growing the power systems business into a fourth growth driver alongside the HDD head, capacitor and magnetics businesses is my responsibility.

Finally, a word on results in the January-March quarter and the outlook for the current quarter. Switching power supplies, and UPS businesses, saw a drop only in China in the March quarter but things tended to trend upward in each business in the fourth quarter due to strong seasonal factors. Accordingly, performance tends to decline in the June quarter. By region, Asia was pretty steady in the March quarter while the June quarter is also looking firm. This is in contrast to Europe and the Americas, where subprime-related sluggishness and seasonal factors are causing a downturn. As of April, we have yet to be impacted by this though.

That concludes my presentation. Thank you.