Slide 1: FY2007, 1st Quarter Financial Results
FY2007, 1st Quarter Financial Results August 10, 2007
Slide 2: Agenda
Agenda 1 Actual figures for Q1, FY2007 2 Outlook for FY2007 Summary Three structural changes Key points for each business 2
Slide 3: Summary of Q1, 2007
Summary of Q1, 2007 10% increase in revenue, 12% increase in Operating profit Strong Cadence and tester business for Semiconductor Design Business 15% increase in revenue for Electronic Components Business by a substantial increase in HDMI devices business and embedded software development business
Slide 4: Actual figures of Q1, FY2007
Actual figures of Q1, FY2007 〔mil. yen〕 Overseas Sanei IT Consolidated FY2006 Increase/ Innotech Sales Hytechs Access profit/loss Q1 decrease Office Net Sales 9,409 910 569 4,149 13,762 12,497 10% Cost of 7,730 728 372 4,018 11,592 10,434 11% Goods Sold Gross Profit 1,679 182 197 131 2,169 2,062 5%
Slide 5: Comparison by segment
Comparison by segment 〔mil. yen〕 Increase/ Q1, FY2006 Q1, FY2007 Decrease Net Sales 12,497 13,762 10% Semiconductor Design 3,967 3,955 0% Electronic Components 8,529 9,807 15% Cost of Goods Sold 10,434 11,592 11% Gross Profit on Sales 2,062 2,169 5% Semiconductor Design 1,386 1,231 △11% Electronic C
Slide 6: Sales from Semiconductor Design Business
Sales from Semiconductor Design Business 〔mil. yen〕 Increase/ Q1, FY2006 Q1, FY2007 Factors decrease Semiconductor Design 3,967 3,955 0% Increase in sales to Cadence 1,717 1,895 10% electronic component manufacturers Overall sales decreased but Semiconductor 1,450 1,150 △21% tester business increase
Slide 7: Sales from Electronic Component Business
Sales from Electronic Component Business 〔mil. yen〕 Increase/ Q1, FY2006 Q1, FY2007 Factors decrease Electronic Components 8,529 9,807 15% HDD 6,521 6,868 5% Stable business for OA・FA Strong demand for flat Electronic Devices 939 1,465 56% display panel TVS ASIC Design and Sales Stable business for
Slide 8: Further improvement of cost structure
Further improvement of cost structure Overall cost coverage ratio 70.3％ Sales Admin. Cost ratio 64.3％ （mil. yen） 61.8％ 1,500 1,280 1,294 1,159 244 240 1,000 237 11.7％ 310 296 308 10.3％ 9.4％ 500 726 759 613 0 Q1, FY2005 Q1, FY2006 Q1, FY2007 Personnel Cost Variable Cost Fixed Cost Cost coverage ratio
Slide 9: Improvement of Non-operating Income
Improvement of Non-operating Income 〔mil. yen〕 Increase/ Q1, FY2006 Q1, FY2007 decrease Operating Income 782 875 93 Non-operating Income △82 △6 76 Ordinary Profit 700 869 169 Net Financial Revenue Currency Exchange （mil. yen） Q1, FY06 Q1, FY07 Q1, FY06 Q1, FY07 0 Innotech -40 Overseas Sales Offices
Slide 10: Agenda
Agenda 1 Actual figures for Q1, FY2007 2 Outlook for FY2007 Summary Three structural changes Key points for each business 10
Slide 11: Summary outlook of FY2007
Summary outlook of FY2007 Strong Q1 results lay a groundwork in achieving financial goals of FY2007, 1st half Solid Cadence business and tester business will help Semiconductor Design Unit increase its sales by two digits Tester business has a potential for larger growth, depending on the investment
Slide 12: FY2007 Estimate
FY2007 Estimate 〔mil. yen〕 Overseas Sales Consolidated Innotech Sanei Hytechs IT Access Offices Profit/loss st Fiscal st Fiscal 1st Fiscal st Fiscal Fiscal 1 half 1 half 1 half 1st half Year Year half Year Year Year N e t S a l e s 19,000 44,000 1,900 3,800 700 1,700 8,500 16,000 29,000 61,000 Cost
Slide 13: Estimate by segment
Estimate by segment 〔mil. yen〕 Increase/ FY2006 FY2007 decrease Net Sales 57,959 61,000 5% Semiconductor Design 14,083 15,700 11% Electronic Components 43,876 45,300 3% Cost of Goods Sold 49,640 52,300 5% Gross Profit on Sales 8,319 8,700 5% Semiconductor Design 4,756 4,900 3% Electronic Components
Slide 14: Sales estimate by business
Sales estimate by business 〔mil. yen〕 Increase FY2006 FY2007 /decrease Semiconductor Design 14,083 15,700 11% Cadence 6,637 7,500 13% Semiconductor Testers* 3,895 4,400 13% Design Consignment Business 3,551 3,800 7% （Sanei Hytechs） Electronic Components 43,876 45,300 3% HDD 32,265 31,000 △4% Electro
Slide 15: Agenda
Agenda 1 Actual figures for Q1, FY2007 2 Outlook for FY2007 Summary Three structural changes Key points for each business 15
Slide 16: Multi-layer structure of growing businesses
Multi-layer structure of growing businesses Electronic Devices Embedded software development LSI design Ramping up of Tester New strategic businesses ＨＤＤ Continuous growth of core business Cadence 04/3 05/3 06/3 07/3 08/3 16
Slide 17: Wide customer-base including excellent companies
Wide customer-base including excellent companies ＳＴＢ 放送・通信 ＦＡ ＮＧＮ Game ＩＣ Cards Hybrid Car Automotive PCBs Electronic ＩＣ Package Electronic Components Components Power ＩＣ Fabless IC Mixed signal IC ＯＡ Fabless ＩＣ RF Overseas Consumer ＭＦＰ ＯＡ Electronics ＣＥ Consumer ＨＤＴＶ ＩＤＭ ＮＡＮＤ Electronics Overseas Ｉ
Slide 18: Rapid expansion of Engineering Division
Rapid expansion of Engineering Division Gross Profit on Sales ［Sales amount］ （mil. yen） 8,000 Sales: 40% annual increase 3,000 Gross profit from Sales: 49％ annual increase 6,000 2,000 4,000 1,000 2,000 0 FY2004 FY2005 FY2006 Sanei Hytechs IT Access Tester 18
Slide 19: Agenda
Agenda 1 Actual figures for Q1, FY2007 2 Outlook for FY2007 Summary Three structural changes Key points for each business 19
Slide 20: Cadence
Cadence Ｑ１ Topics Strong demand for electronic components and semiconductors Renewal of major three-year contract in the end of June (total 1.65 bil. yen） Six new customer wins Future strategy Focus on renewal of major contracts Win new customers by expanding SiP product portfolio （mil. yen） Orders
Slide 21: Semiconductor Testers
Semiconductor Testers Ｑ１ Topics Started delivery to ＳａｎＤｉｓｋ Future strategy Opportunities for smaller size testers rising →October evaluation sample, January mass production Expansion to burn-in testers （mil. yen） Sales Forecast 2,000 Investment trends on Testers 1,000 0 FY2005 FY2006 FY2006 FY2007
Slide 22: Design Consignment Business (Sanei Hytechs)
Design Consignment Business （Sanei Hytechs） Ｑ１ Topics Joined in ASIC business by winning Faraday（Taiwan） business Future strategy Cutting-edge design：90nm 3 million gate level Cutting-edge process:65nm design verification What is a so-called “Design Insourcing Company”? Product Concept Product Conce
Slide 23: Hard Disk Drive (HDD)
Hard Disk Drive （HDD） Ｑ１ Topics Overcame the market deflation trends by strengthening OA/FA businesses and improved the profit rate Future strategy Focus on selected businesses for CE and keep expanding the OA/FA businesses to further improve the profitability （mil. yen） Actual sales Renovation of H
Slide 24: Electronic Devices
Electronic Devices Ｑ１ Topics Rapid expansion of HDMI application Future strategy In addition to high-end HDTV, expand business for middle-end HDTV as well After the production adjustment, larger demand for PS3 is expected. （mil. yen） 1,500 Actual sales Other than Silicon Image Entertainment 1,000 Au
Slide 25: ASIC Consignment Business and Sales
ASIC Consignment Business and Sales Ｑ１ Topics Stronger sales power responding to increased customer base Future strategy Focus on sales mainly to Faraday Promote to fabless companies in addition to system makers Cell-based ＡＳＩＣ Structured ＡＳＩＣ End-users Current （System makers） customers ＦＰＧＡ Busines
Slide 26: Embedded Software Development (IT Access)
Embedded Software Development （IT Access） Cultivating new market by deep development expertise Expansion of STB market Expansion of IC card market Supporting digital terrestrial and NGN; Innotech joined the FCF・SSFC （FeliCa Formatting IPSP(IPTV standard) service-in from Jan. 08 Consortium） as a firs
Slide 27: Ramping up of Royalty Income
Ramping up of Royalty Income Ordinary Profit ［Sales］ 2,000 Sales: 20% of annual growth （mil. yen） Ordinary Profit: annual growth of 39% 300 1,500 200 1,000 100 500 0 FY2004 FY2005 FY2006 FY2007 Royalty Income Design consignment, software sales, etc. 27
Slide 28: 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