Investor Relations

[ 2nd Quarter of fiscal 2014 Performance Briefing ]Magnetic Application Business Products Business and Film Application Products Business

Mr. Atsuo Kobayashi

Mr. Atsuo Kobayashi
Executive Vice President

Magnetic Application Products Business

For the magnetic application products business, or the recording device business, the HDD market last year in FY March 2013 was estimated at 570 million units. In FY March 2014, our estimate is currently at 540 million units, an increase of 10 million units from the forecast in July. The shipment index in Q1 was 74, Q2 is 81, and in Q3 we project that it will also be 81. For sales, Q1 was 60.2 billion yen and Q2 was 66.3 billion yen.
For the magnetic application products business, the graph indicates the HDD market projections by application. The PC market is shrinking, but on the other hand the data center market will expand. It may seem to be increasing slowly, but as the number of heads used per HDD is expected to increase, such as the number of HDD heads used in data centers increasing from 8 to 10, it can more than offset the total number. As such, the HDD head market shipment projects are at 2 billion units.
For other magnetic application products, as mentioned earlier, the magnet business has been struggling this year, particularly in the VCM for HDDs. Also due to the flood in Thailand, business loss has not yet recovered. There was also a delay in launching a consolidated site in China in Q2. In order to expand the business, we will increase sales of rare earth-free magnets such as dy-free neodymium magnets and rare earth-free high-performance ferrite magnets; as well as improve profitability by improving productivity by integrating production of wet-molded ferrite magnets, enhancing the end-to-end process in China.

Film Application Products Business 

For the film application products business, as mentioned earlier, we are going to withdraw from the LTO and Blu-ray markets, which will be completed by the end of this fiscal year. On the other hand, the energy devices business has been growing rapidly. The laminated battery market has been used by mobile and IT devices such as tablets or smartphones and is in the double-digits. The annual shipment growth rate of lithium batteries is currently above 20% and will exceed 30% in 2016. When it comes to the mid-term direction of the business, we would like to start in-house production of the materials of the batteries and have a vertically integrated business model, as well as provide environmentally friendly batteries for eco-cars and storage batteries.