Q1.	What is the reason the estimated profit level for the second half of FY2005 (April 2004 - March 2005) will rise compared to the level expected for the first half?
A1.	The profit margin for the second half is expected to rise because the structural reforms, which has been carried out since the previous fiscal year, will take effect, and sales of more profitable 300mm equipment are expected to grow.

Q2.

What are the prospects for acceptance of orders during the July - September period and thereafter?

A2.

The acceptance of FPD production equipment orders for the sixth-generation platform has almost been completed, and we expect that there will be a lull in this category. With respect to semiconductor production equipment, there was a tendency for some of the orders anticipated for the July - September period to be placed during the April - June period, which is earlier than initially planned, but we do not reckon that this category will enter a phase of substantial decline. Medium- and long-term prospects of order acceptance are varied from one application to another, and from one region to another. At this moment, we cannot say anything definite.

Q3.

You have announced that you are considering changing the basis for reporting sales. (1) When will new basis for reporting sales be introduced? (2) How will the current basis for reporting sales be changed? (3) How will the change affect your financial results?

A3.

(1) It is currently under consideration. (2) The most likely plan is to report sales not when a product is shipped (current basis), but when its start-up is completed. (3) If the new basis for reporting sales is introduced during FY2005, sales will be reported about two months later than currently, and therefore approximately 100 billion yen's worth of sales will be carried forward to FY2006 (April 2005 - March 2006). In other words, there is a possibility that sales for FY2005 will be reduced by 100 billion yen from the current sales forecast.

Q4.	You have announced that you are considering allocating an accrual for product warranties in the financial statements. Could you give us some details?
A4.	In the past, we stipulated a certain warranty period when we delivered a product and reported expenses every time when support was provided. In the future, we will adopt a method of reporting the approximate accrual for support expenses when sales are reported.

Q5.

Why is the gross profit margin for the July - September period expected to fall compared to the April - June period? Why is the profit margin expected to improve in the second half of FY2005?

A5.

Due to changes in the composition of products making up sales, and in sales trends for each region, we expect that the profit margin for the July - September period will be slightly lower than that for the preceding quarter. The profit margin will improve during the second half of FY2005 because each of our plant will bring greater volume production benefits, the percentage of sales of 300mm products with high added value will rise, and sales for regions with a relatively high profit margin will grow.

Q6.	We have heard that the profit margin for FPD production equipment is falling. Is this true?
A6.	LCD panels are designed for consumer electronics, and it is a fact that panel manufacturers have a very high awareness of cost and there is very strong price pressure on production equipment manufacturers.

Q7.

What is the present situation of the inventory turnover and the accounts receivable turnover, and what are the turnover goals for the periods?

A7.

The inventory turnover was around 70 days at the end of the April - June period, and we will maintain this level in the future as well. The immediate goal is to reduce the inventory turnover to 60 days or less. The accounts receivable turnover is currently 159 days, and we would like to reduce accounts receivables sooner mainly through efforts made by each business unit to shorten the start-up period.

Q8.	What is your specific approach to improve the company's financial strength?
A8.	We would like to restore positive free cash flow, after the cumulatively negative free cash flow of the past several years. In addition, we will reduce interest-bearing debts, which currently stand at about 130 billion yen, to less than 100 billion yen by the end of this fiscal year.

Q9.	Forecasts for the FPD market recently published by SEAJ indicate that the market will grow at a rate of 75% this year, but TEL's sales of FPD production equipment will grow at a rate of only 30%. What is the reason for this?
A9.	One possible factor is that of the FPD production equipment handled by TEL, plasma etch/ash systems continue to perform well but the market share for coaters/developers has declined.

Q10.	You have said that a favorable business environment is expected to continue in the long term, but there has been no case in which the SPE industry continued to be strong for two years or longer. How do you think the business environment will change in the future?
A10.	The phase of adjustment we currently expect is not a sharp downturn, such as experienced with the collapse of the IT bubble, but rather a moderate adjustment with a relatively shallow bottom, and the SPE industry can withstand this.

Q11.	Is there a plan for reporting sales of the new immersion process product CLEAN TRACKTM LITHIUSTM i, by the end of FY2005?
A11.	We plan to deliver six to seven units of the product.