Earnings Release

2Q FY2012 Earnings Release Conference Q&A

  • What is the outlook for orders in the October-December period and the January-March 2012 period?

    We project that orders for semiconductor production equipment (SPE) will be approximately 100 billion yen during the October-December period and will increase slightly during the January-March 2012 period. With respect to flat-panel display and photovoltaic cell production equipment (FPD/PVE), we expect orders to be approximately 10 billion yen in the October-December period.

  • Orders for SPE in the October-December period are expected to increase substantially to 100 billion yen, but are there any uncertain factors?

    We are aware that investment for cutting-edge logic devices has started, and we believe that orders from customers in South Korea and Taiwan will increase. There are no significant positive changes in other regions, but there are no uncertain factors.

  • What percentage of the SPE orders during the October-December period will be accounted for by foundries?

    About 20 percent (specialized logic foundry makers).

  • What is the outlook for SPE capex in 2012?

    We expect a decrease of about 10% on a calendar year basis and a slight increase on a fiscal year basis ending March 2013.

  • When do you think investment for mass production will start in conjunction with a recovery of fundamentals, rather than cutting-edge investment for miniaturization?

    We believe that a full-fledged recovery will take place no earlier than mid-2012.

  • Some says that SSDs, which are currently the driving force behind NANDs, do not require cutting-edge investment; how do you think the views of NAND makers concerning capital investment will change?

    We believe that SSDs will become increasingly integrated, and as a result, cutting-edge investment is needed. Also, NAND applications are rapidly expanding. We expect stable growth to continue and for capital investment to achieve at least double-digit growth.

  • How much will etch system profitability at the new Miyagi Plant be improved?

    By reducing manufacturing lead time from 3.5 months to 2 months and taking other measures, we believe that we can improve profitability by at least 5% points.

  • What percentage of etch system sales this fiscal year will be accounted for by RLSA etch system?

    Customer evaluation at high-end processes is proceeding well, and customers are starting to select on RLSA each system in critical processes where our technological superiority can be used. It's less than 10% at present.

  • How many orders have you received for dry cleaning systems?

    Certas has differentiated itself from its competitors and already commands a 60% to 70% market share, and we have high expectations for the future. However, that market is still too small-in the 10 billion to 20 billion yen range-to raise the position of our cleaning systems.

  • What is the status for OLED? Are you attempting to develop production equipment for lighting? What is your sales target for four or five years from now?

    More than lighting, we aim to develop production equipment for OLED for large television sets.We will increase the degree of completion of both our own proprietary evaporation method and the inkjet method being developed in cooperation with Seiko Epson Corporation for mass production. We believe that our products are superior in terms of use efficiency of organic materials. We project that sales will exceed 50 billion yen.

  • Shipments of OLED production equipment are scheduled to begin around 2013; isn't the schedule rather late?

    We are aware that we got off to a late start, but we believe that large OLED televisions will become popular in homes in 2013 or later. If we launch outstanding products, we will be in time even in 2013.

  • What is the status of your cost-cutting measures? What has had the greatest cost-cutting effects?

    Measures to raise manufacturing efficiency have been the most effective. We are raising productivity in conjunction with the start of operations at the new plant and working to reduce costs through measures including overseas procurement.

  • Will fixed costs be lower than last year?

    Fixed costs will increase by at least 10 billion yen from last year. In addition to higher development costs, depreciation costs at the new Miyagi Plant will be an increase factor. Higher manufacturing efficiency, however, will reduce fixed costs by billions of yen.

  • You increase R&D expenses by 2.0 billion yen-what is being increased?

    The increase is not attributable to any specific development topic. We are increasing spending as necessary in each development area.

  • Under what circumstances will TEL implement share buy-backs or undertake M&A in this industry, which is susceptible to extreme fluctuations?

    It is necessary for the company to maintain a certain amount of cash for stable operations. We would prefer to use cash in excess of that amount for organic growth including M&A rather than doing share buy-backs. Although we have no specific plans at this time, if there is a business that can complement our products and the price is right, we would actively consider it. We are continuously investigating M&A projects.