Investor Relations | IR Events | Performance Briefing

[ 3rd 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

My name is Atsuo Kobayashi. Let me talk about the magnetic application products business and the film application products business

Magnetic Application Products Business

The shipment volume of recording devices (HDD heads) in the 3rd quarter exceeded projections made at the time of closing procedures for the 2nd quarter due to an increase in demand for new model game machines and in demand for PCs as customers replaced machines running Windows XP. Let me explain the increase in the shipment volume, etc., later. TDK began to ship 640GB 2.5 inch HDDs in the 3rd quarter. These are used for 2TB HDD using 3 platters. Although the pace of expansion of the HDD Near-line market is slightly slower than expected, TDK expects that the market will expand over the medium and long terms.

In magnets, the productivity of ferrite magnet manufacturing at consolidated sites in China has begun to improve. Integrated production lines have already been constructed. However, in the case of metal magnets in which we lost market share due to the Great Flood in Thailand (in particular, VCMs in hard disc drives), sales remained weak, and TDK, to our regret, is facing difficulties. Under these conditions, regarding metal magnets, TDK will make efforts to expand sales of rare earth free magnets or rare earth less magnets. In the case of ferrite magnets, TDK has a plan to reduce costs using a new technology.

In power supplies, TDK wants to expand sales without fail as capital investment in semiconductor production equipment, FA machines and measurement devices heads for recovery. As for DC-DC converters for hybrid or plug-in hybrid vehicles and for EVs, TDK began overseas production in Malaysia in view of costs.

TDK forecast that the recording device/HDD market would be ¥500 million and 70 million units in FY March 2013 and ¥500 million and 50 million units in FY March 2014 (an increase of 10 million units from end-October). Assuming that the shipment volume in the 1st quarter of FY March 2013 was 100, the shipment volume in the 1st quarter, 2nd quarter and 3rd quarter of FY March 2014 are expected to be 74, 81 and 86, respectively. At present, TDK expects that the shipment volume in the 4th quarter will be 76.

Film Application Products Business

In energy devices (rechargeable batteries), sales to the smartphone and tablet PC markets remained firm. At present, TDK places top priority on the smartphone and tablet PC markets. However, TDK is continuing its R&D efforts to expand both its customer base and business domain.

In applied films, TDK is scheduled to completely withdraw from the data tape business as core business in the 4th quarter and to completely withdraw from the Blu-ray Disc business in the 4th quarter as planned.

That’s all. Thank you.

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