Q1.	Concerning orders for memory during the July-September period, what was the ratio between DRAM and NAND flash memory?
A1.	Orders for DRAM were strong, accounting for 65% of total orders for memory, while orders for NAND flash memory accounted for 35%.

Q2.

How do you see orders developing for the October-December period?

A2.

First of all, the market for LCD panels has entered a period of production adjustment, and orders for flat panel display (FPD) equipment are expected to slow down. Orders for semiconductor production equipment (SPE), on the other hand, will continue to be brisk in the context of the market's overall upswing. Overall, we project that active SPE orders will make up for the slower FPD equipment orders, with total results for the October-December period expected to be at the same level as the July-September period.

Q3.	Orders for which region and which applications are expected to do well in the October-December period?
A3.	In terms of regions, orders from Taiwan are expected to be particularly strong; in terms of applications, orders for DRAM are expected to be strong.

Q4.	How do you see orders developing for the January-March period?
A4.	Since the momentum in orders for memory will remain strong, we do not expect much overall change in January-March period performance compared to performance for the October-December period.

Q5.	Although the backlog of orders suggests that sales of 900 billion yen can be expected for this fiscal year, why has the figure of 830 billion yen in expected sales been announced?
A5.	The announced figure reflects the fact that the total backlog of orders includes orders for delivery in the next fiscal year.

Q6.

What is the outlook for semiconductor-related capital expenditures in 2007?

A6.

We see the overall situation continuing to be favorable again next year. Until summer, the delivery of SPE will continue in order to meet demand for DRAMs, which begins with the introduction of PCs with Windows Vista early next year through to the Christmas sales. After summer, we expect memory-related investments to continue for a prolonged period, with capital expenditures related to NAND flash memory, which are temporary slowing, continuing to pick up nicely. Logic-related investments, meanwhile, differ depending on each customer's situation, but overall we think they will see stable growth. There is no change in our view that capital expenditures will increase as we head toward 2008.

Q7.	TEL has said it expects positive growth of 5-10% in semiconductor-related capital expenditures in 2007. When do you expect 2007 orders to peak?
A7.	It is difficult to predict clearly the future outlook in the semiconductor industry. The figure of 5-10% growth next year is merely our overall estimate based on data we currently have on hand. We cannot clearly say when orders will peak during the year.

Q8.

It cannot be denied that future orders for memory could reach the 70% level in TEL total SPE orders. But past experience has shown that if investments increase too much the next period of recession arrives more quickly. How do you feel about that situation?

A8.

The role of memory has changed, and the market has expanded as memory products have gradually been directed toward consumer use. Memory cards are being quickly produced and are consumed rapidly. They have even assumed the image of being consumables. In addition, memory cards are becoming a memory medium for applications such as video camcorders, gradually replacing hard disks. DRAM shipment will increase after Vista goes on sale in 2007, but the increase will not only be for DRAM. By region, moreover, demand is increasing in the newly emerging economies. Seen from this perspective, we expect to see memory consumption increase across a wide spectrum. It seems wise, therefore, not to depend only on past experience.

Q9.

What market shares do your various products hold?

A9.

Sales and profits of our thermal processing systems have both increased, due to the positive effect of our new product TELINDY. We expect that our market share of those systems will also increase. Customers are also evaluating positively other new thermal processing systems we plan to introduce. We have been successful in developing our 8th generation Exceliner, a new FPD coater/developer. Customers with a strong desire to invest are adopting it, which gives us great confidence. We have introduced wafer probers of good performance as well and are putting up a good sales fight amidst brisk competition. Together with an increase in the number of processes for dielectric etch systems, we saw an increase in the actual number of chambers installed, helping expand the size of the market itself. Competitor manufacturers are claiming that they are increasing their sales, but we believe that our rate of increase is equivalent or higher. Our corporate customers have highly evaluated the performance of the new chamber we introduced last year, and we are confident that future sales will increase. In preparation for that increase, we decided to expand the space allotted for etch system manufacturing in our Miyagi Plant.

Q10.	Which system products in particular will contribute notably toward improving your operating margin during the second half of this fiscal year?
A10.	The new thermal processing system TELINDY can be mentioned as in particular, but all of our products have seen actual improvements.

Q11.	What sort of technical advantage does the new 8th generation FPD coater/developer Exceliner provide to contribute to improving your market share?
A11.	As the new product clearly differs in external appearance from the previous product, it contains almost no transfer robots. Its reliability has increased due to its stable transfer capability. The performance of the coater section has also been improved.

Q12.	Your successful efforts to reform business operations during the past year must have been worthwhile in established a new business. At present, with business continuing so well, you are expected to have begun developing new businesses and moving into new business areas. What is the company's actual doing in this area?
A12.	We are making particular efforts to develop CVDs and etch systems that utilize RLSA plasma technology. In the FPD area, we are developing a CVD system, and we are considering development of an organic EL although it will be some time in the future before it is ready.

Q13.

Operating margin for the second half of this fiscal year is 16.3%. For the next fiscal year, your company is probably aiming at a higher percentage than that. What risk factors, if any, might worsen your margin?

A13.

We would like to increase our operating margin further during the next fiscal year. We are taking various steps to achieve that, such as introducing new products, improving our production efficiency, and making efforts to keep down additional cost increases. Although we might not succeed in all our efforts, if we can succeed in even half of them our operating margin will increase. One risk factor is our decision to move ahead with increased capital expenditures. If the market should move in the wrong direction, the increase in fixed expenses will frustrate our efforts. But at the same time, we are not thinking of the short term. We are making preparation now for realizing further growth and increased profits during the second peak of prosperity down the road.