Mr. Shinichi Araya
Senior Vice President
I would like to explain changes in sales amounts between the second and third quarters in the passive components business.
Business Overview in Passive Components (2Q vs. 3Q)
Third-quarter net sales in the passive components business were ¥108.4 billion. This represented a ¥1.1 billion, or 1%, decline from the ¥109.5 billion recorded in the second quarter. Looking first at capacitors, third-quarter sales were ¥35.2 billion, down ¥2.5 billion, or 6.6%, from the second-quarter result of ¥37.7 billion. Ceramic capacitor sales declined despite solid growth in sales in the automotive field. The overall decline was due to lower sales for AV equipment and to distributors. At present, we are working to strengthen our cost competitiveness by expanding operations in China, and introducing new processes, among other actions. Looking ahead, we will endeavor to restore our competitiveness, while bolstering our product lineup. Sales of aluminum electrolytic and film capacitors recorded firm sales growth for use in industrial equipment and renewable energy equipment. These products are expected to see increasing demand going forward. In light of this forecast, we plan to optimize our supply framework, including boosting production capacity, ahead of next fiscal year.
Turning to inductive devices, third-quarter sales were ¥33.9 billion, which was ¥0.4 billion, or 1.2%, lower than the ¥34.3 billion recorded in the second quarter. Sales of inductive devices fell in the home information appliances field, including for use in AV equipment. However, as in the second quarter, there was healthy growth in sales of EMI filters, power choke coils and other products for use in smartphones and other mobile phones as well as tablet PCs. Furthermore, sales increased of noise filters for automobiles and industrial equipment. Besides optimizing production capabilities in order to respond to expanding demand ahead of next fiscal year, we will aggressively bring competitive new products to market.
Other passive components posted net sales of ¥39.3 billion, ¥1.8 billion, or 4.8%, more than ¥37.5 billion in the second quarter. As in the second quarter, the main reason was higher sales of high-frequency components for smartphones and mobile phones stemming from synergies with EPCOS following our acquisition of this company. Looking ahead, we will strive to expand business by launching new products for smartphones and 3G terminals. These markets are expected to grow going forward.
That concludes my presentation. Thank you for your attention.