Investor Relations | IR Events | Performance Briefing

[ 1st Quarter of fiscal 2015 Performance Briefing ]Recording Device Business

Mr. Atsuo Kobayashi

Mr. Atsuo Kobayashi
Executive Vice President

My presentation is on the Recording Device business.

Recording Device Business

In terms of our outlook for the HDD market, we estimated it at 552 million units in FY March 2014, and in April issued full-year guidance for FY March 2015 of a decline to 535 million units. We have revised this figure up to 552 million units. This is based on more sluggish near-line storage demand offset by the higher-than-expected demand for 2.5-inch hard disks used in game consoles and in the PC segment. The replacement demand due to Windows XP is a positive factor at present, and we have raised our overall forecast by 17 million units. Based on a figure of 100 for the first quarter of FY March 2014, our HDD heads shipment index was 111, 116 and 98 in Q2, Q3 and Q4 of last year, falling to 95 in Q1. Our current index projection for Q2 is 99.

Turning to the medium-to-long-term outlook for the Recording Device business, to repeat what we have said before, demand for HDDs is driven by changes in applications within each market segment. While PC demand is in decline, demand from data centers is forecast to continue rising. This sector generates more demand for HDD heads per disk. Specifically, while a notebook hard drive needs only one or two HDD heads for a single hard disk, the number of heads per HDD is between six and fourteen for data center applications. As the world’s only specialist manufacturer of HDD heads, TDK is committed to developing more advanced HDD heads with higher recording density. We retain the R&D and production capacity to keep on developing new products in this area. We see growing HDD demand for data center applications driving the need for increased storage capacity, which we think will translate into higher HDD head usage in time. The markets for enterprise and near-line storage and other data center applications will require state-of-the art products, which TDK aims to develop and supply. New products include thermal-assisted magnetic recording (HAMR) devices and the next generation of reading heads. In suspension assemblies, we plan to introduce micro dual stage actuators. We see these innovations generating stable earnings growth for the Recording Device business over the longer term. Thank you.

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