Slide 1: FY2008 2nd Quarter Financial Results
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Slide 2: Agenda
Agenda 1 FY 2008 1 Half Results st 2 FY 2008 Outlook 11
Slide 3: Summary of FY2008 1st Half Results
Summary of FY 2008 1st Half Results Tester, device, and HDD businesses substantially decreased ; the ordinary profit decreased by 40%. As for the semiconductor design business, Cadence business remains solid but tester business became weak due to less investment and the design service profitability
Slide 4: Segment Comparison
Segment Comparison 〔mil. yen〕 FY2007 1st half FY2008 1st half Change Net Sales 28,298 16,898 -40% Semiconductor Design 9,076 7,007 -23% Electronic Components 19,221 9,890 -49% Cost of Goods Sold 24,009 13,486 -44% Gross Profit 4,289 3,411 -20% Semiconductor Design 2,621 2,067 -21% Electronic Compone
Slide 5: Sales by Business
Sales by Business 〔mil. yen〕 FY2007 1H FY2008 1H Change Factors Semiconductor Design 9,076 7,007 -23% Decrease due to more Cadence 3,764 3,442 -9% multi-year contracts Semiconductor Testers 2,556 1,306 -49% Less facility investment Replacement from current ASIC Design/Sales 909 551 -39% projects Des
Slide 6: Higher Profit than the Estimate
Higher Profit than the Estimate 〔mil. yen〕 Estimate （Jul. 28） FY2008 1H Change Net sales 16,500 16,898 2% Operating Profit 600 843 41% Ordinary Profit 550 846 54% Net Profit 200 495 148% Ordinary Profit Increase in gross profit Change Factor Semiconductor Design: 37, 171 Electronic Components: 134 (
Slide 7: Financial Structure is Improving
Financial Structure is Improving 70% Ratio of bank loans Equity capital ratio 62.9％ to total assets 60% 57.6 50% 45.0 40% 38.4 30% 〔mil. yen〕 20% 16.2 FY2007 FY2008 1H Outstanding loans 6,539 3,477 9.6％ 10% Total assets 40,439 36,383 Capital adequacy 23,299 23,051 0% 05/3 06/3 07/3 08/3 08/9 6
Slide 8: Pursue the "Advanced Service" Business
Pursue the “Advanced Service” Business Achieved high profitability which is comparable to SI companies by promoting the Advanced Service business FY2008 1H Actual Results Average of 25 Average of 34 Innotech semiconductor system integrators trading houses Operating Profit rate ５.０％ ２.２％ ５.４％ Ordinar
Slide 9: Agenda
Agenda 1 FY2008 1 half results st 2 FY2008 Outlook 88
Slide 10: Summary of FY2008 Outlook
Summary of FY2008 Outlook FY2008 outlook is as the estimated; targeting to secure the estimated profit by stable business sectors. Further promoting the Advanced Service business by capturing customers’ needs; Focus on the growth of each business unit to start its own new effort. 9
Slide 11: Estimate by Segment
Estimate by Segment 〔mil. yen〕 FY2008 FY2007 Change ［Estimate］ Net Sales 52,836 33,000 -38% Semiconductor Design 18,927 14,400 -24% Electronic Components 33,909 18,600 -45% Cost of Goods Sold 44,272 26,150 -41% Gross Profit 8,564 6,850 -20% Semiconductor Design 5,517 4,170 -24% Electronic Components
Slide 12: Estimate by Business
Estimate by Business 〔mil. yen〕 FY2008 FY2007 Change [Estimate] Semiconductor Design 18,927 14,400 -24% Cadence 7,984 7,100 -11% Semiconductor Testers 5,497 2,500 -55% ASIC Design/Sales 1,702 1,100 -35% Design Consignment 3,744 3,700 -1% （Sanei Hytechs） Electronic Components 33,909 18,600 -45% HDD 2
Slide 13: The Economy Impacts Each Business Differently
The Economy Impacts Each Business Differently Cadence Embedded software Stable （IT ACCESS） ・Standard of semiconductor EDA ・Deep penetration into customers ・Multiple year contract->less impact ・Strong consignment expertise to from the economic downturn support customers needs Design consignment (Sane
Slide 14: Efforts for Recovery and Growth
Efforts for Recovery and Growth Relentless pursuit of cost performance Focusing on strategic customers Expanding product portfolio to win new customers Launching new products and ramping up sales Encouraging collaboration among different business units, rotating human resources 13
Slide 15: Cadence and Others
Cadence and Others 〔100 mil. yen〕 - Sales Trends - Back-logs are steadily expanding 80 ２Ｈ 60 １Ｈ ５.５ bil. yen ７ bil. yen 40 FY2006 FY2008 1H 20 （Launching new product, Arteris) 0 FY2007 FY2008 Arteris is the only successful company for the Estimate Interconnect technology under the NOC （Network on Ch
Slide 16: Semiconductor Testers and Others
Semiconductor Testers and Others Requirements for the NAND/Analog market 〔100 mil. yen〕 - Sales Trends - : low speed, low price, customization 60 2H 1H 40 20 Expansion of testing solutions Cost performance cut the test time and improve throughputs 0 FY2007 FY2008 Customers needs Estimate User-friend
Slide 17: ASIC Design Consignment
ASIC Design Consignment - Sales Trends - Favorable for low cost devices 〔100 mil. yen〕 ; Taking off with mass production Aggressive sales activities (20 design) 20 Various applications (medical / communication) 2H New product (45nm) announcement adds 1H a momentum 10 Active orders for ASICs includin
Slide 18: Design Consignment (Sanei Hytechs)
Design Consignment （SaneiHytechs） - Sales Trends - Focusing on our own strength 〔100 mil. yen〕 Growing businesses: 40 Power supply and MPU businesses 2H leveraging the core analog technology 1H Profitability improvement: Reviewing for efficient operations 20 Relentless cost reduction Strengtheni
Slide 19: HDD (Hard Disk Drive)
HDD （Hard Disk Drive) Further industrial restructuring - Sales Trends - Three vertically integrated manufacturers 〔100 mil. yen〕 2H （Small-sized HDD） 2H Efforts by HGST 1H（Small-sized HDD） 1H Business structure reform （Integration of manufacturing sites and withdrawal 200 from unprofitable businesse
Slide 20: HDD (Hard Disk Drive)
HDD (Hard Disk Drive) - Sales Trends- Efforts by Innotech Small-sized HDD 〔100 mil. yen〕 Focusing on our own strong areas 2H 1H Focusing on strategic customers Stronger collaboration with HGST 200 to achieve higher cost performance Small-sized HDD than competitors Enhancing engineering support Obtai
Slide 21: HDD Industry Restructuring
HDD Industry Restructuring Vertically integrated companies: 3 Horizontal job sharing companies: 2 Seagate ＄12.2 bil. Samsung ＄2.8 bil. Negotiating to sell off？ WD ＄6.6 bil. Toshiba ＄2.5 bil. HGST ＄5.6 bil. Dedicated head manufacturer: 1 Fujitsu ＄2.7 bil. TDK 330 bil. yen Industry restructuring Dedic
Slide 22: Electronic Components
Electronic Components Silicon Image proposes next generation - Sales Trends - networking technology to be de facto standard and aiming further growth 〔100 mi. yen〕 100 2H 1H Connecting the entertainment 50 network by PEN・BEN 0 FY2007 FY2008 Estimate ＰＥＮ・ＢＥＮ: Entire home network framework proposed by
Slide 23: Embedded Software Development (IT ACCESS)
Embedded Software Development （IT ACCESS) 【Needs for embedded product development】 〔100 mil. yen〕 - Sales Trends - Reduction of development cost, Development lead-time, Technical challenges 30 2H 1H 20 One stop solution for embedded products 10 Supporting digital terrestrial broadcasting and next ge
Slide 24: Are We Resilient?
Are We Resilient? Deeply penetrating customers by collecting relevant information and understanding their needs Owning competitive product line-up and having many excellent companies in our customer base Increasing cost performance Focus on strategic customers Various development support for c
Slide 25: Returning Profits to Stock Holders
Returning Profits to Stock Holders Maintaining the original level of dividend Interim Full-year Dividend 8 yen 20 yen Acquiring treasury stocks Stocks which can be acquired ： 1,780,900 stocks （as of the end of October） Due ： March 31, 2009 24
Slide 26: Note for Forward Looking Statements
Note for Forward Looking Statements The information provided in this presentation includes forward looking statements based on current expectations, forecasts or beliefs. Such forward looking statements include a number of preliminary assumptions about future events that are subject to factors and u