Investor Relations | IR Events | Performance Briefing

[ 3rd Quarter of fiscal 2018 Performance Briefing ]Q&A

Q1. You have indicated that you will take steps to increase production of capacitors going forward. In general, large manufacturers have adopted a policy of cutting down on front-end process by miniaturizing compact, large capacitance products and substantially increasing their capability. However, TDK’s stance seems to be somewhat different. What is your attitude toward miniaturization?
A1. There is no difference in terms of our approach to the miniaturization of MLCCs. In the case of products for ICT, our view is that we can miniaturize them while switching to low voltage, but there’s a significant difference in the case of automotive applications. We need to consider how to miniaturize products while maintaining their reliability. The reason that TDK is mainly involved in large-size products is that we often deal with inquiries for on-board chargers and the like. Based on the modularization of large-size, large capacitance products, it should be possible to replace various kinds of capacitors, including film capacitors and aluminum electrolytic capacitors, with MLCCs. We are currently implementing technical measures aimed at miniaturization.
Q2. What are the current supply-and-demand conditions and the medium-term forecast for MLCCs and inductors?
A2. In terms of MLCCs, a high proportion of the products made by TDK are for automotive applications, and as you know, supply and demand is tight. We are taking steps to increase production so that we can meet customers’ needs as much as possible. With regard to inductors, products for automotive applications are performing extremely well. Demand is especially strong for power inductors, so we are taking steps to increase production when needed and continuing to monitor demand trends. We are seeing an adjustment for certain ICT-related applications, which has had an impact.
Q3. How has the Sensor business progressed compared to three months ago?
A3. At the CES expo held in Las Vegas in January, we mainly exhibited sensors at the TDK booth. Attendees were able to try out 15 different products, of which 3 were released as new products the same week. The first was a barometric pressure sensor which we have already incorporated into a seven-axis motion sensor module; the newly released version boasts high accuracy and extremely low power consumption for a single sensor. The second product that we released was a high-performance MEMS microphone featuring a high signal-to-noise ratio for use in AI speakers and the like. The third product was an electronic compass equipped with TMR sensors developed in partnership with Asahi Kasei Microdevices that delivers high performance and low power consumption. New products like these will be introduced in the next fiscal year and beyond, including an ultrasonic fingerprint sensor for which we are currently obtaining practical feedback from customers. Our customer base is expanding for TMR Sensors since we have started to introduce ICT and mobile applications in addition to the existing automotive applications. Temperature and pressure sensors for automotive applications are also growing steadily, which will contribute to strong sales both this fiscal year and next fiscal year.
Q4. TMR sensors will be used in electric power steering (EPS) and robots for industrial equipment. How much of a share does TDK forecast for these applications?
A4. TMR sensors are being used not just for EPS but also for applications such as wipers. We previously reported that we have 40 different items in development for which we are obtaining practical feedback, but that has now increased to 60 or 70. We don’t know whether all of them will be successful, but since they are automotive applications, we consider it highly likely that they will be adopted.
Q5. Is your customer base for six-axis motion sensors growing? And when will sales of sensors for automotive applications start to grow or accelerate in earnest?
A5. Since completing the acquisition of InvenSense in May 2017, we have been leveraging the TDK Group’s broad customer base as much as possible and continuing to acquire customers for mobile-related applications, especially in Asia. Furthermore, we are aiming to further expand consumer applications related to entertainment, game consoles, and so on. In terms of sensors for automotive applications, the volume will not necessarily increase suddenly with the start of our new Medium-Term Plan in the next fiscal year, but we forecast that sales of six-axis MEMS motion sensors will start picking up. The business will start with in-cabin applications. Moreover, in the short to medium term, by combining InvenSense’s resources with Tronics’ ultra-high-performance motion sensors, technology, and resources, we intend to move into the industrial equipment market as well with applications for robotics, condition-based monitoring, etc.
Q6. Would it be right to say that supply and demand is tight for lithium polymer batteries?
A6. Yes, that’s how we see it.
Q7. Will you increase your Rechargeable Batteries production capacity next fiscal year to a similar extent as this year? And will your capital investment next year be similar to this year?
A7. We will continue increasing cell production capacity next fiscal year, and we also intend to make similar capital investments to this fiscal year.
Q8. This year, you have been working on power batteries and micro batteries. What kind of applications will they be used for, and what kind of role will they play?
A8. Micro batteries using relatively small cells are starting to be installed in compact devices such as game consoles, watches, and other wearables. Going forward, we want to expand the range of applications, especially during the current year. We are making power batteries which are large in terms of cells. They require power management system and packaging technology and the approach is different from smartphones and other ICT applications, so we are currently still in the process of developing them. In terms of applications, we are working on products for general-purpose drones, but we also intend to tackle high-power batteries for commercial drones and the like. In addition, we want to expand into UPS and stationary applications.