Q1.

What is your forecast for orders during the January to March 2007 period? What is the future outlook for the market?

A1.

Orders during the January to March period are strong, and there were almost no cancellations or extensions in deliveries; we expect that orders are expected to be approximately 200 billion yen. Over the medium to long term, we anticipate the demand for devices will expand from PCs, which have been the primary source of demand, to include general consumer products. In terms of territorial expansion, we believe that new markets will develop in India and China, and there is no concern about future market growth. Orders for FPD production equipment are likely to gradually recover.

Q2.	What has been the impact on orders from the decline in prices for memory?
A2.	The fall in DRAM prices is a cause for concern, but device manufacturers are actively investing in expanding production capacities and for increasing market shares, and we see their investment is going as it is planned. Also, as prices of NAND Flash memory decrease, demand is increasing, and as a result investments are expected to increase in the summer and thereafter.

Q3.	What were the percentages of orders for DRAM and Flash memory in the October to December period?
A3.	In the October to December period, DRAM accounted for 77% of total orders for memory and 23% for Flash memory.

Q4.	What is your corporate forecast of the DRAM bit growth rate?
A4.	In 2007, the DRAM bit growth rate will be 65% and it will be about 60% in terms of supply.

Q5.	You expect of logic manufacturers. What does this mean specifically?
A5.	We expect that demand, mainly for mobile phone logic devices, will increase.

Q6.

Operating income margin in the third quarter exceeded 20%; what were the driving forces behind this?

A6.

The operating income margin in the third quarter was driven by new products. Also, efforts to control fixed costs were effective, plant operating rates increased, and productivity improved. There were also temporary factors including effects from the product mix and a review of accrual for product warranties, resulting in better figures than initially expected. Excluding these factors, we think substantial growth was about 17%.

Q7.	What are the budgets for the next fiscal year for research and development, capital investment, and depreciation and amortization?
A7.	We are currently preparing the budget, but we plan to maintain R&D expenses at about the same levels as this year, and depreciation and amortization expenses will increase by 2 to 3 billion yen over the 21 billion yen this year.

Q8.	Do you expect an increase in employment costs?
A8.	The number of employees is not increasing as much as planned, and therefore it appears there will not be a substantial increase in employment costs.

Q9.	Profitability has recovered spectacularly, but haven't cash flows recovered yet?
A9.	In the future, we expect results from shortened startup periods for new products. Also, we aim to reduce production lead times from the current 80 to 90 days to about 60 days, within two years. Through these reductions, we will improve cash flows.

Q10.

Why is there a disparity between the downward revision of financial forecasts of manufacturers of testing equipment such as tester and probers and the upward revision of front-end process equipment manufacturers? Also, why do you think there is so much disparity in results among front-end process equipment manufacturers?

A10.

The trends of orders and sales of testing equipment are different from those for front-end process equipment. We expect that orders for our probers will recover early in the fiscal year ending March 2008. The reason for the disparities in results between ourselves and others, among front-end process equipment manufacturers, is differences in the technological performance of the various equipments, and we believe that even greater differences among process equipment manufacturers will appear in the future.

Q11.

Assuming that the economy enters a downturn in the future, what measures will management take?

A11.

If we first take action when the economy enters a downturn it will be too late. From now on, we will work to control fixed costs and to carefully manage inventories. We will also focus our efforts on increasing production efficiency, adopting valuable technologies internally, and raising the added value of new products. In addition, we believe that if the economy does take a turn for the worse, it is important to make preparations for when the economy turns upward again, rather than tightening up on everything.