FY2011 Financial Announcement meeting Q&A
The composition of SPE which has the highest profitability among our business segments increased compared to the previous fiscal year. Moreover, our cost reduction efforts made marginal profits of SPE improve even compared to FY08 which was our record year.
The effective tax rate of FY11 was 27%. The primary reason is the benefit from tax exemption of R&D expenses of 7.2 billion yen. It is also from the tax effects related to unrealized profit eliminations on inter-company transactions of 4.1 billion yen. The effective tax rate of FY12 will be normalized to around 35%.
Expecting no unusual or infrequent losses related to the Earthquake in FY12.
The status is changing every moment. However we expect there are no significant effects as a whole year. Tokyo Electron has three facilities in affected areas, Tokyo Electron Tohoku, a plant for thermal processing systems (Oshu City, Iwate), Tokyo Electron Technology Development Institute, for RLSA (Sendai City, Miyagi) and Tokyo Electron Miyagi, a plant for etch systems (Matsushima City, Miyagi). There were no serious damages on our facilities and inventories. Infrastructures such as electricity and water already have been restored and employees already got back to the office. Regarding the status of suppliers, we confirmed there would be no issues on April and May. The effects after June is currently under investigation, however, we expect quicker recovery than we expected. Microcontrollers are one component of our products, but we don't think we are in the serious situation. The manufacturer of microcontrollers is also our customer and Tokyo Electron is sending 100 to 200 engineers to help quick recovery.
Regarding the status of supplier side, we need to keep gathering the information because supply chain status is changing every moment. Regarding the status of customer side, the individual timing of investments of our customers might be affected. However we expect minimal impacts on an annual basis.