[ 1st Quarter of fiscal 2009 Performance Briefing ]Q&A
- Q1. Previously, you said that you expected capacitor sales to increase by around 1% for the year. Has your forecast changed in any way? Also, please tell us how capacitor sales will change on a quarterly basis.
- A1. At our previous earnings release conference, we projected a 1% annual increase in capacitor sales. We are now projecting a decrease of around 3%, however. First-quarter capacitor sales declined 12% year on year, and were down 2% from the fourth quarter of the previous fiscal year. We expect second-quarter capacitor sales to rise 10% over the first-quarter sales. Second-half sales are as per our initial plan.
- Q2. I'd like a little more information. In his presentation, Mr. Enami said that of the 7.9 billion yen decline in earnings from the previous quarter, one-third related to the HDD heads. What proportion related to capacitors?
- A2. The one-third you refer to was in terms of monetary sales. Of the 15.5 billion yen decline in sales, HDD heads accounted for just over one-third.
- Q3. What about in terms of operating income?
- A3. The single biggest factor compared with the fourth quarter was HDD heads. Capacitors were the next biggest factor.
- Q4. Could you put a figure on the impact?
- A4. HDD heads accounted for roughly half the decline. Capacitors, meanwhile, accounted for about 30%.
- Q5. How do you expect things to change from the first quarter to the second quarter? You seem to be projecting an increase in sales of around 20.0 billion yen. From what you said earlier, that would mean capacitors would increase by only about 4.0 billion yen to 5.0 billion yen. Looking at the handout, HDD heads would also increase by only about one point some billion yen. What then do you expect to drive the remaining 1.5 billion yen or so increase? Please give us figures in terms of product sector. Earnings as well would improve significantly, by more than 10.0 billion yen. Please also comment on that on a product-by-product basis.
- A5. The others sector accounts for the largest share of the projected increase. We expect energy device sales to rise substantially. Electronic materials and electronic devices are each expected to rise by about the same amount. This is followed by heads in the recording devices sector.
- Q6. Can we assume the same order of contribution for earnings?
- A6. Capacitors business declined significantly in the first quarter. In that sense, electronic materials are likely to be the biggest contributor to improved earnings due to a certain degree of recovery in capacitor earnings. The next biggest contributors should be electronic devices and others. Recording devices should improve by about the same level as electronic devices.
- Q7. Regarding HDD heads, is there a possibility of doing business with the largest HDD drive manufacturer and, if so, when?
- A7. We are a head manufacturer, so we would be happy to increase transactions with any customer. You are probably referring to Seagate. We have had inquiries from Seagate, as you suggest, and they are currently evaluating various samples sent for qualification purposes. Because Seagate is still evaluating our products, this doesn't mean that we have already started doing business with them. If everything goes smoothly, we may be able to start some form of business at the end of the year.
- Q8. Would it be correct to assume that transactions of products for both 3.5-inch and 2.5-inch drives would begin at about the same time? If business did eventuate, how would that affect your relationships with existing customers?
- A8. It depends on the customer, so we can't comment specifically on the products. Regarding existing customers, we will be straight with them and work to gain their understanding.
- Q9. So, can we assume that Seagate is currently evaluating products for 2.5-inch and 3.5-inch products?
- A9. How and what is being evaluated is the customer's business, so I can't comment.
- Q10. My question concerns capacitors. I believe that fixed expenses increased in the April-June quarter because of the new Yurihonjo plant, but could you tell me the extent of the increase? Further, although it has been less than one month since the new plant came on line, how have customers evaluated the cost competitiveness of the new plant and product performance? What is your own evaluation?
- A10. Depreciation expenses in fixed expenses increased by about 0.5 billion yen. Furthermore, labor costs rose due to the employment of production line workers. Energy costs also rose due to testing. Costs rose by about 0.7 billion yen to 0.8 billion yen in total.
Regarding new products, we are trying to start up mass production particularly of high- and large-capacitance products as well as thin-layer products. One specific example is the development and mass production of products with a gap between dielectric layers of 1 micron or less. In the future, we hope to move from 0603-type products to 0402-type products.
