Q1.

What is the outlook for the semiconductor/FPD production equipment market?

A1.

Although it is still too early to say anything definite in terms of the orders received for semiconductor production equipment, we expect to enter an increase phase in the second half of 2005. It is possible that the overall semiconductor production equipment market might shrink by about 20%. Orders received for FPD production equipment will depend on market trends for large flat panel TVs and recovery will be relatively quick if the market share occupied by LCD TVs increases.

Q2.	The percentage of orders received from memory makers is increasing. Do you foresee a correction phase for excessive supply?
A2.	We currently see no need emerging for substantial correction concerning either DRAM or flash memory. Also, we are not particularly concerned about investments in memory chips accounting for a high percentage of orders received.

Q3.	What is the outlook for orders received for the October-December period and later?
A3.	Although there is a declining trend for the October-December period compared to July-September period, it is expected to be a mild rather than a rapid decline.

Q4.	Will the orders received from memory manufacturers continue to be high in the October-December period?
A4.	Although the percentage is expected be less than that for the July-September period (55%), it will continue to be high.

Q5.	What are the trends by region expected for orders received during the October-December period.
A5.	We expect inquiries from South Korea to be strong.

Q6.	What caused the profit margin to fall during the July-September period?
A6.	We expect special expenditures to be incurred during the second half of the fiscal year due to the renovation of equipment and other factors. The inclusion of those expenditures in costs in advance resulted in a decline in our profit margin. This was a one-off measure and will not continue.

Q7.	What is the outlook for free cash flow and SG&A expenses for the fiscal year ending March 2005?
A7.	We hope to maintain a higher level of free cash flow during the second half than we had in the first half. SG&A expenses are expected to be held at the same level as those in the first half (56.4 billion yen).

Q8.	Do you expect any large-scale disposal of inventory or increases in fixed costs for the fiscal year ending March 2005?
A8.	We currently anticipate no large-scale disposal of inventory for this fiscal year. Concerning fixed costs, we expect a one-off increase related to changes in accounting policies.

Q9.	Are there any plans to invest in production facilities in the near future?
A9.	Since we have already increased our productivity, we feel that we currently have sufficient production capabilities and are thus not planning any near-future investment in production facilities.

Q10.	Is any financing being planned related to the redemption of straight bonds worth 30 billion yen in 2005?
A10.	At present we believe that redemption of those bonds will be possible without financing.

Q11.	Compared to the increase in net sales, profits do not seem to have increased all that much. As CEO, how will you be evaluating the company's business performance for the fiscal year ending March 2005?
A11.	-ansi-language: EN-US; mso-fareast-language: JA; mso-bidi-language: AR-SA; mso-bidi-font-size: 12.0pt; mso-bidi-font-family: 'Times New Roman'">We have a target of 20% or more for future operating income margin. In the background of a slow down phase in the market, I feel that we are making steady progress toward achieving our performance targets for the year.

Q12.

What will TEL be like in the future, after structural reforms are completed?

A12.

The goal of structural reforms is to build a corporate structure capable of maintaining profits even during declining phases in the market, that is to say, it is for gaining a strong foothold for the company's stability. We are working on drawing up our growth strategies with the aim of achieving them by the first quarter of the next fiscal year. The current stage is one for planting the seeds for new fields, technologies, and equipment. When we establish strategies we set clear goals for ourselves, simple goals that include numerical targets.

Q13.	What is the degree of risk for FPD production equipment orders being cancelled?
A13.	Although we imagine no risk of cancellation, there is the possibility of receiving requests for delayed delivery.

Q14.	Are there any products for which there has been a large drop in the company's market share?
A14.	Although our market share for FPD coater/developer has declined, there has not been any drop in market share for our other products.

Q15.	What type of device is envisioned to drive the next upturn in the market?
A15.	Mobile equipment, particularly mobile phones, is expected to be a trigger for the next upturn. For the middle to long term, semiconductors installed in automobiles are expected to continue to grow.

Q16.	What is the situation regarding the development and shipment of new products?
A16.	We have already begun shipping Coater/Developer for liquid immersion technology. The joint development of High-k and Low-k with several consortiums and cutting edge customers continues to move forward.