Three Months Ended June 30, 2005

Transcription

Kyocera Corporation Business Presentation
August 4, 2005
KYOCERA Corporation
Forward-looking Statements
Certain
Certainofofthe
thestatements
statementsmade
madeininthis
thisdocument
documentare
areforward-looking
forward-lookingstatements
statements(within
(withinthe
the
meaning
of
Section
21E
of
the
U.S.
Securities
and
Exchange
Act
of
1934),
which
are
based
meaning of Section 21E of the U.S. Securities and Exchange Act of 1934), which are based
on
onour
ourcurrent
currentassumptions
assumptionsand
andbeliefs
beliefsininlight
lightofofthe
theinformation
informationcurrently
currentlyavailable
availabletotous.
us.
These
forward-looking
statements
involve
known
and
unknown
risks,
uncertainties
and
These forward-looking statements involve known and unknown risks, uncertainties and
other
otherfactors.
factors.Such
Suchrisks,
risks,uncertainties
uncertaintiesand
andother
otherfactors
factorsinclude,
include,but
butare
arenot
notlimited
limitedto:
to:
general
economic
conditions
in
our
markets,
which
are
primarily
Japan,
North
America,
general economic conditions in our markets, which are primarily Japan, North America,
Europe,
Europe,and
andAsia,
Asia,including
includingininparticular
particularChina;
China;changes
changesininexchange
exchangerates,
rates,particularly
particularly
between
the
yen
and
the
U.S.
dollar
and
Euro,
respectively,
in
which
we
make
between the yen and the U.S. dollar and Euro, respectively, in which we makesignificant
significant
sales;
our
ability
to
launch
innovative
products
and
otherwise
meet
the
advancing
sales; our ability to launch innovative products and otherwise meet the advancingtechnical
technical
requirements
of
our
customers,
particularly
in
the
highly
competitive
markets
for
ceramics,
requirements of our customers, particularly in the highly competitive markets for ceramics,
semiconductor
semiconductorparts
partsand
andelectronic
electroniccomponents;
components;the
theextent
extentand
andpace
paceofoffuture
futuregrowth
growthor
or
contraction
in
information
technology-related
markets
around
the
world,
including
those
contraction in information technology-related markets around the world, including thosefor
for
communications
and
personal
computers;
events
that
may
impact
negatively
on
our
markets
communications and personal computers; events that may impact negatively on our markets
or
orsupply
supplychain,
chain,including
includingterrorist
terroristacts
actsand
andoutbreaks
outbreaksofofdiseases;
diseases;and
andthe
theoccurrence
occurrenceofof
natural
naturaldisasters,
disasters,such
suchas
asearthquakes,
earthquakes,ininlocations
locationswhere
whereour
ourmanufacturing
manufacturingand
andother
otherkey
key
business
facilities
are
located.
Such
risks,
uncertainties
and
other
factors
may
cause
our
business facilities are located. Such risks, uncertainties and other factors may cause our
actual
actualresults,
results,performance,
performance,achievements
achievementsor
orfinancial
financialposition
positiontotobe
bematerially
materiallydifferent
different
from
any
future
results,
performance,
achievements
or
financial
position
expressed
from any future results, performance, achievements or financial position expressedor
or
implied
by
these
forward-looking
statements.
We
undertake
no
obligation
to
publicly
implied by these forward-looking statements. We undertake no obligation to publiclyupdate
update
any
forward-looking
statements
included
in
this
document.
any forward-looking statements included in this document.
1
Consolidated Financial Highlights
- Three Months Ended June 30, 2005 (Unit : Millions of yen)
Three months ended
June 30, 2005
Amount
Net sales
Percentage
change
June 30, 2004
% to net sales
Amount
% to net sales
265,073
100.0
293,143
100.0
-9.6
Profit from operations
14,283
5.4
34,751
11.9
-58.9
Pre-tax income
17,215
6.5
38,062
13.0
-54.8
Net income
8,603
3.2
21,982
7.5
-60.9
EPS (diluted-yen)
45.88
-
117.17
-
-
Depreciation
13,149
5.0
13,233
4.5
-0.6
Capital expenditures
27,036
10.2
11,811
4.0
128.9
Dividends paid
9,452
-
5,736
-
-
Free cash flow
-14,736
-
17,668
-
-
R&D expenses
14,456
5.5
13,875
4.7
4.2
U.S. dollar (yen)
108
-
110
-
-
Euro (yen)
136
-
132
-
2
Market Environment and Business Achievements
- Three Months Ended June 30, 2005 -
Market Environment
9 Component demand bottomed out, then recovered
9 Components price drop was larger than expected
Business Achievements
9Sales and profit growth in Applied Ceramic Products Group
exceeded expectations
9Determined and implemented additional structural reforms at
KWC
9Established new global consolidated management system
3
Business Situation in 1Q FY3/’06
Item
KWC
Weak recovery in
component demand for
digital consumer products
Expanding component
price erosion
Prolonged stagnation in
Chinese PHS market
Please refer to accompanying note on page 1.
Reason
2Q onward
9 Expand lineup from 2Q,
including new ODM models
9 Lower sales due to
9 Start all handset production at
focus on existing
Flextronics from September
models
9 Aim to break even on full-year
basis
9 Slumping sales in
Electronic Device
Group
9 Increasing production at large
handset makers from 2Q
9 Greater component demand
reduces severity of price cuts
9 Slow sales of PHS
related products
9 Increasing orders from 1Q,
drive sales recovery from 2Q
9 Material writedown
4
Consolidated Sales by Operating Segment
Three months ended
Operating segment
June 30, 2005
June 30, 2004
Percentage
change
Amount
% to net
sales
Amount
% to net
sales
Fine Ceramic Parts Group
15,905
6.0
18,527
6.3
-14.2
Semiconductor Parts Group
29,715
11.2
32,840
11.2
-9.5
Applied Fine Ceramic Products
Group
26,983
10.2
21,253
7.3
27.0
Electronic Device Group
60,811
22.9
70,068
23.9
-13.2
Components business
133,414
50.3
142,688
48.7
-6.5
Telecommunications Equipment
Group
45,780
17.3
66,313
22.6
-31.0
Information Equipment Group
57,908
21.9
56,733
19.4
2.1
4,373
1.6
7,400
2.5
-40.9
108,061
40.8
130,446
44.5
-17.2
Others
28,168
10.6
25,926
8.8
8.6
Adjustments and eliminations
-4,570
-1.7
-5,917
-2.0
-
265,073
100.0
293,143
100.0
9.6
Optical Equipment Group
Equipment business
Total
5
Consolidated Operating Profit by Operating Segment
Three months ended
Operating segment
June 30, 2005
June 30, 2004
Percentage
change
Amount
% to net
sales
Amount
% to net
sales
Fine Ceramic Parts Group
1,890
11.9
3,053
16.5
-38.1
Semiconductor Parts Group
Applied Fine Ceramic Products
Group
Electronic Device Group
3,350
11.3
4,924
15.0
-32.0
4,891
18.1
3,614
17.0
35.3
4,496
7.4
11,528
16.5
-61.0
14,627
11.0
23,119
16.2
-36.7
Telecommunications Equipment
Group
Information Equipment Group
-6,441
-14.1
-249
-0.4
-
7,661
13.2
10,207
18.0
-24.9
Optical Equipment Group
-1,768
-40.4
-2,055
-27.8
-
Equipment
-548
-0.5
7,903
6.1
-
Others
1,348
4.8
2,888
11.1
-53.3
15,427
5.8
33,910
11.6
-54.5
1,254
-
4,031
-
-68.9
452
-
127
-
255.9
82
-
-6
-
-
17,215
6.5
38,062
13.0
-54.8
Components business
Total operating profit
Corporate and others
Equity in earnings of affiliates and
unconsolidated subsidiaries
Adjustments and eliminations
Pre-tax income
6
Consolidated Financial Forecast
- Year Ending March 31, 2006 (Unit : Millions of yen)
Year ending March 31, 2006
Amount
Net sales
% to net sales
Year ended March 31, 2005
Amount
Percentage
change
% to net sales
1,240,000
100.0
1,180,655
100.0
5.0
Profit from operations
124,000
10.0
100,968
8.6
22.8
Pre-tax income
135,000
10.9
107,530
9.1
25.5
Net income
81,000
6.5
45,908
3.9
76.4
EPS (diluted-yen)
432.00
-
244.81
-
-
Depreciation
67,000
5.4
58,790
5.0
14.0
Capital expenditures
100,000
8.1
63,176
5.4
58.3
R&D expenses
53,000
4.3
54,398
4.6
-2.6
U.S. dollar (yen)
106
-
108
-
-
Euro (yen)
129
-
135
-
-
7
Consolidated Financial Forecast Assumptions
- Year Ending March 31, 2006 -
1. Shipment volume forecast for key electronic equipment:
No change from initial forecast
2. Components price forecast: No change from initial forecast
3. Assumed exchange rates: Initial forecast
$US
¥102
Euro
¥134
[Impact of exchange rates fluctuation]
Compared with FY3/’05:
Net sales
Pre-tax income
Current forecast
¥10
106
6
¥12
129
9
¥ -16.4 billion
¥ -6.0 billion
8
Shipment Volume Forecast for Key Electronic Equipment and
Components Price
CY2005
CY2004
Mobile phones
+5%~10%
600
PCs
Approx. +5%
170
Digital cameras
Approx. +10%
60
DVD recorders
+60~70%
9
Approx. +50%
12
Digital TVs
(Incl. rear projection TVs)
(Millions of units)
FY3
FY
3/’06 components
components price
price…
…Forecast average 10~15% drop year on year
9
Consolidated Financial Forecast by Operating Segment
- Compared With FY3/’
FY3/’05 FY3/’05
Net sales
Components business:
+37.4
+17.1 +1.9
+30.1
1,180.7
Equipment business:
+7.2
Information
-11.8
Equipment
Telecom-5.0
munications
+11.0
Optical
Equipment
Equipment
Electronic
+1.3
Applied Device
Semicon Ceramic
Fine
-ductor Products
Ceramic Parts
Parts
FY3/’06
forecast
(Unit: Billions of yen)
+13.0
+1.7 +59.3
Adjustments and
Others eliminations
FY3/’05
Equipment business:
+29.1
Pre-tax income
Components business:
-0.5
+0.5
107.5
-1.0
(Unit: Billions of yen)
+27.5
-2.1 135.0
-6.2
+4.4
FY3/’06
forecast
+13.4 +1.0
+21.9
1,240.0
Corporate
and others
-4.4
10
Kyocera Group Management Strategy
Ὁ Boost customer satisfaction
Ὁ Promote globalization
Ὁ Realize highly profitable enterprise
Ὁ Develop and maintain corporate culture
FY3/’’06 Targets (Consolidated)
FY3/
Net sales
Pre--tax income
Pre
Pre--tax income ratio
Pre
11
Management Challenges for FY3/’06
1. Boost profitability of Telecommunications Equipment Group
2. Improve profit margins of Electronic Device Group
12
Boost Profitability of Telecommunications Equipment Group
Operating profit
(Billions of yen)
7.0
Ὁ Establish new business structure
ᾚᾦᾒ
Ὁ Lower break-even point
Ὁ Enhance lineup by launching new products
Ὁ Timely launch of new products : Increase market share at KDDI Group
Domestic mobile
communications
Ὁ Partially utilize ODMs
Ὁ Cultivate new markets with iBurst TM
PHS
related products
FY3/06 1Q
~
~ -6.4
2Q
Ὁ Introduce new models to Willcom Inc.
3Q
4Q
FY3/06
Full-term
iBurstT M is a trademark ok of ArrayComm, Inc. (U.S.A)
13
Enhance Profitability of KWC (1)
KWC Challenges
(1) Reform cost structure
ὼReduce fixed costs ḷ Lower breakbreak-even pointὼ
pointὼ
(2) Expand sales
ὼConstant and timely new product launchὼ
launchὼ
Establish New Business Structure
14
䋭 Establish New Business Structure 䋭
KWC/Kyocera
Develop and commercialize
next-generation models
KWI
KTRC
Develop key devices and
core technologies
Develop software
ODMs
Develop and commercialize
familiar models
KTRC: Kyocera Telecommunications Research Corporation
KWI: Kyocera Wireless (India) Private Ltd.
15
䋭 Restructuring KWC by Shifting to Asia 䋭
Sales & Marketing
Innovation / Design
Tech-Faith
China
Flex Korea
KWC USA
Design House
KZC
China
ODM
Seoul
Guiyang
Bangalore
Product
Yokohama
San Diego
Shanghai
Doumen
Shift to Asia
Manufacturing,
R&D, SCM
Flex China
KWI
India
Manufacturing
Software development
KTRC
Qcom USA
Kyocera
Japan
New Technology
Develop high tier Products
Qcom: Qualcomm, Inc.
Flex: Flextronics International Ltd.
Tech-Faith: Techfaith Wireless Communication Technology Limited
KZC: Kyocera Zhenhua Communication Equipment Co., Ltd.
16
䋭 Lower BreakBreak-Even Point 䋭
Unit volume
Based on March 2005 standard of 100
Break-even point
100
March 31, 2005
1st half of FY3/’06
~
0
0
Target
Schedule for Production Shift
Shift from San Diego to Mexico
Shift from Mexico to Flextronics
Complete shift to Flextronics
17
䋭 Strengthen Development Capability 䋭
Numbers of employees at KWI
400
200
291
328
132
0
30
April 2003
April 2004
April 2005
June 2005
18
䋭 Product Roadmap 䋭
CY05 2H
Slider Remix TM Slider Remix TM
KX5
KX5-BT
CY06 1H
Jet
KX18
CY06 2H
Black
Orchid
Jaguar
Black
Canary
High
Milan
KX9C/B
Candid
KX16
KX9A
KX160
Storm
Thunder
Thunder
Fox
Victory
Moon
Cat
Mid
Prisma
KX17
Topaz
KX7
Dorado
KX13
KW690 Glitter
Shadow
Mouse
Cat
Nova
Kane
Low
KR1 Router
Data
6800
Module
6800
PC Card
USB Mod
These models are different from real models.
19
䋭 Aggressively Launch New Products 䋭
Proportion of New Product Sales (Unit Base)
100%
50%
0%
New
products
1Q
ᵏᵯ
2Q
ᵐᵯίʖेὸ
(Forecast)
3Q
ᵑᵯίʖेὸ
(Forecast)
4Q
ᵒᵯίʖेὸ
(Forecast)
FY3/’06
20
䋭 Expand Sales by Launching New Products 䋭
Quarterly Shipment
Volume Forecast
200
Based on FY3/’06 1Q standard of 100
214
100
146
137
134
100
0
FY3/’05
Quarterly Average
1Q
2Q
3Q
4Q
(Forecast)
(Forecast)
(Forecast)
FY3/’06
21
Boost Profitability of Telecommunications Equipment Group
Operating profit
(Billions of yen)
7.0
Ὁ Establish new business structure
ᾚᾦᾒ
Ὁ Lower break-even point
Ὁ Enhance lineup by launching new products
Ὁ Timely launch of new products : Increase market share at KDDI Group
Domestic mobile
communications
Ὁ Partially utilize ODMs
Ὁ Cultivate new markets with iBurst TM
PHS
related products
FY3/06 1Q
~
~ -6.4
2Q
Ὁ Introduce new models to Willcom Inc.
3Q
4Q
FY3/06
Full-term
iBurstT M is a trademark ok of ArrayComm, Inc. (U.S.A)
22
Improve Profit Margins of Electronic Device Group
Exploit fullfull-scale demand recovery from 2Q to boost profitability
Maximize
Sales
Minimize
Expenses
Enhance product lineup and
increase market share
Raise productivity
9 Launch new high-value-added products
9 Increase production volume in China
(capacitors, crystal products)
9 Develop new products
9 Expand new production system
(small-size and high-capacity capacitors)
Cultivate new markets
9 Develop RF modules
9 Expand applications
Reduce cost of purchased products
9 Continued activities with suppliers
(thermal printheads, capacitors)
9 Develop Asian market
23
High
Digital Electronic Equipment Trends and Development of MLCCs
Base Station
High-speed
High-speeddata
data
processing
processing
䌄䌡䌴䌡䌒䌡䌴䌥
䌒䌡䌴䌥
䌄䌡䌴䌡
Server
Base Station
䃂
High-capacitance capacitors
䃂High
High-capacitance
capacitors
䃂
Low
ESR/ESL
capacitors
䃂 Low ESR/ESL capacitors
High
High Capasitance
Capasitance
Ubiquitous Network
Server
Game
Desk Top PC
PDA
䌗䌩䌲䌥䌬䌥䌳䌳
䌗䌩䌲䌥䌬䌥䌳䌳䌌䌁䌎
䌌䌁䌎
CDMA20001X
Enhance
Enhance mobility
mobility
䃂
䃂Miniature
Miniatureceramic
ceramiccapacitors
capacitors
Ultra
small
size
(0402/0201
Ultra small size (0402/0201type)
type)
DSC
Mounting
Mounting
Home Appliance
Mobility
Mobility
Vending
machine
W-CDMA
High
24
New MLCCs Order Forecast for FY3/’06
Based on standard of 100 for 1Q results
Stimulate new product orders,
especially miniature and high capacitance capacitors
200
180
123
100
䋱䌑
䋲䌑
䋳䌑
䋴䌑
(Apr.–June)
(July–Sep.)
(Oct.–Dec.)
(Jan.06 – Mar.06)
FY 3/’
3/㪌’06
㪉 ᦼ(Forecast)
25
Mass--prod. Items: SIZE [X㬍
Mass
[X㬍 Y mm]
Roadmap for Key Crystal Related Components
VCT-208C
KT17/18/18B
(H:1.5mm m ax.)
(H:1.5mm m ax.)
4.0㬍 2.5
5.0㬍 3.2
TCXO Road Map
For Mobile Phone䋧GPS
VCT-212C
(H:1.2mm m ax.)
3.2㬍 2.5
CX-3225SB(H:0.60mm m ax.)
KSX-23(H:0.85mm m ax.)
KT21/VCT-214C
KT22
(H:1.0mm m ax.)
(H:1.0mm m ax.)
2.5㬍 2.0
2.0㬍 1.6
X’tal Unit Road Map
for Radio & Mobile
Communication System
CX-2520SB
KT2520
(H:0.55mm m ax.)
(H:1.05mm m ax.)
CX-2016SB
New products
(H:0.55mm m ax.)
SAW device for terrestrial
digital mobile broadcasting
Ultra high frequency device
CY2000
CY
2000 䌾 CY2003
Terrestrial
Digital-TV
Mass-production
Massproduction
2.4GHz
Mobile TV
Wireless LAN 5.0GHz
CY200
CY
2004
4
ES
CY2005
CY
2005
CY2006
CY
2006
26
Roadmap for High Frequency Modules
CY2005
Mobile
Market Trend
ASM&FEM
Bluetooth
CY2006
Dual / Triple / Quad Phone
Camera / TV
Bluetooth
WLAN
Camera
Bluetooth
Dual / Triple
(GSM DSC PCS )
Ver.1.2
Quad / SP7T
Ver.2.0+EDR
CY2007
CY2008
CY2009
World Phone
Ubiquitous
Phone
Camera / TV
Bluetooth / HDD
WLAN / GPS
SLC SUB
Connectors
SP8T / SP9T
LTCC SUB
Ver.3.0+EDR
Ver.2.0+EDR + WLAN
X’tal & TCXO
WLAN
11b.
GPS
RFIC + B/BIC
Others
Structure
Trend
11b./g
RF Module
FM Radio
Module
1. Single side surface mount 1. Single side surface mount
2. Metal cap
2. Resin coating
3. Embedded elements
Chip ANT
11b./g
SAW
TV Tuner
Module
Epoxy
Chip Capacitor
Integrate group-w ide capabilities to
realize sophisticated, high performance
and miniature modules
1. Cavity mount
2. Resin coating
1.
2.
3.
4.
Cavity mount + bare element mount
Resin coating
Embedded elements
Supports large size modules
27
Kyocera Group Mid- to Long-term Strategy
Become a “creative company that
continues to grow in the 21st century”
century”
Strategy: Promote “high
high--value
value--added diversification”
diversification”
Ὁ Make each business into a highly profitable, valuable business
(pre-tax income ratio over 15%)
Ὁ Concentrate management resources into valuable businesses
ḷ Execute policy of business selection and concentration
28
New Management System
Aim to be a “creative company that continues to grow”
grow”
CEO
Formulate and execute mid- and
long-term management policy and
strategy
Management Strategy
Financial Strategy
Business Execution
CFO
COO
Formulate and execute financial strategy
Day-to-day busine ss execution to
achieve management plans
29
Kyocera Group Business Portfolio (1)
Market growth
High
Organic packages
Color MFPs/printers
Medical and dental implants
Organic EL displays
Fuel cells
High-resolution camera
modules
Automotive components
CDMA handsets
5%
MLCCs
Cutting tool s
Mid
Fine ceramic parts
Ceramic packages
Solar cells/modules
PHS-related products
Components for optical
communications
Crystal products
Monochrome MFPs/printers
Connectors
Thermal printheads
STN LCDs for industrial use
2%
Low
Low
(Kyocera estimate as of July 2005)
Mid
High
Global market share
30
Market growth
High
Organic packages
Color MFPs/printers
Organic EL displays
Fuel cells
modules
CDMA handsets
5%
MLCCs
Cutting tool s
Mid
Fine ceramic parts
Ceramic packages
Solar cells/modules
communications
Crystal products
Connectors
Thermal printheads
2%
Low
Maintainhigh
highmarket
marketshare
share and
and boost
boostprofit
profitratio
ratio
ὉὉMaintain
Conduct aggressive
aggressiveR&D
R&Dinvestment
investmentto
to achieve
achieve
ὉὉConduct
thesegoals
goals
these
Low
Mid
High
Global market share
31
Market growth
High
Organic packages
Color MFPs/printers
Organic EL displays
Fuel cells
modules
CDMA handsets
Fine ceramic parts
Ceramic packages
Solar cells/modules
communications
5%
MLCCs
Ὁ
Implement
capital
investmentsto
to
Ὁ Implement
capital investments
Cutting
tool s
maintainand
andinprove
inprove
profitability
Monochrome
MFPs/printers
maintain
profitability
Mid Connectors
Pursue high
highreturn
return
on
investment
ὉὉPursue
on
investment
STN
LCDs
for industrial use
Crystal products
Thermal printheads
2%
Low
Low
Mid
High
Global market share
32
Thermal Printhead Business Strategy
ὉὉImplement
mprove profitability
Implementcapital
capitalinvestments
investments to
to maintain
maintainand
andi improve
profitability
ὉὉ Pursue
Pursue high
highreturn
returnon
oninvestment
investment
9 Boost profit ratio by expanding overseas production
9 Utilize production technology development center
9 Secure profit by creating new applications and markets
FAX
Barcode
Card
DPP
Medical
Monochrome
Color
33
Market growth
High
Organic packages
Color MFPs/printers
Organic EL displays
Fuel cells
modules
CDMA handsets
5%
Fine ceramic parts
Ceramic packages
Solar cells/modules
communications
MLCCs
Cutting tool s
Crystal products
Expand businesses
businesses
aggressively
to become
becomeaa market
market
Monochrome
MFPs/printers
ὉὉExpand
aggressively
to
Mid Connectors
Thermal printheads
leader
leader
ὉFocus
Focuson
onprofitability
profitabilityand
andincrease
increasemarket
marketshare
share
Ὁ
2%
Low
Low
Mid
High
Global market share
34
Automotive Components Business Strategy
ὉὉExpand
Expandbusinesses
businessesaggressively
aggressivelyto
to become
becomeaamarket
market leader
leader
ὉὉFocus
Focuson
onprofitability
profitabilityand
andincrease
increase market
marketshare
share
9 Establish project team and pursue strategic development with customers
䋭 Focus on product development leveraging Kyocera Group’s integrated technological expertise 䋭
Material development
capability
Packaging technology
capability
Highly reliable design, development and
production technology capabilities
Analysis and evaluation
technology capabilities
Integrate technologies in component and
equipment businesses
9 Develop high-value-added products and create new markets
Develop products for
diesel engine market
Common rail
injector
Piezo actuators
Ceramic glow plugs
9 Establish production and sales bases in China
35
Market growth
High
Organic packages
Color MFPs/printers
Organic EL displays
Fuel cells
modules
CDMA handsets
5%
MLCCs
Cutting tool s
Mid
Fine ceramic parts
Ceramic packages
Solar cells/modules
communications
Crystal products
Connectors
Thermal printheads
2%
Low
ὉὉPrioritize
Prioritizemarket
marketshare
share expansion
expansionand
andinvest
invest
heavily
heavilyto
to achieve
achievethis
this
ὉὉTolerate
Tolerateshort-term
short -termdecline
shortdeclinein
inprofitability
profitability
Low
Mid
High
Global market share
36
Market growth
High
Fine ceramic parts
ὉὉExpand
share
and
boost
profit
ratio
Expand market
market
share
and
boost
profit
ratio
modules
Ceramic
packages
Solar cells/modules
ὉὉConduct
aimed
at
increasing
market
Conductinvestment
investment
aimed
at
increasing
market
Automobile parts
share
share
Organic packages
Color MFPs/printers
Organic EL displays
Fuel cells
CDMA handsets
5%
MLCCs
Cutting tool s
Mid
communications
Crystal products
Connectors
Thermal printheads
2%
Low
Low
Mid
High
Global market share
37
Cutting Tools Business Strategy
ὉὉExpand
Expandmarket
marketshare
shareand
and boost
boostprofit
profitratio
ratio
ὉὉConduct
Conductinvestment
investmentaimed
aimedat
at increasing
increasingmarket
market share
share
9 Increase sales in Asian market
9 Augment product range using superior material technology
9 Create internal integrated production line,
beginning with materials
9 Exploit global production network/SCM
Dongguan Shilong Factor y
9 Maximize synergies
China Technical Center
38
Market growth
High
Organic packages
Color MFPs/printers
Organic EL displays
Fuel cells
modules
CDMA handsets
5%
Fine ceramic parts
Ceramic packages
Solar cells/modules
communications
MLCCs
Crystal products
Cutting tool s
Mid
Thermal printheads
Connectors
2%
Low
Products earmarked
for investment in FY3/’06
Low
Mid
High
Global market share
39
Details of Strategic Capital Investment for FY3/’06
Net Increase in prepre-tax income in FY3/’
FY3/’08: ¥15.0 billion (compared with FY3/’
FY3/’05)
Organic material components
Operations began
June 2005
Solar cells/modules
Operations begin at
Shiga Plant: Sep. 2005
Czech Plant: Aug. 2005
(planned)
Parts for LCD fabrication
equipment
Operations begin
October 2005 (planned)
LCDs
Operations begin
November 2005 (planned)
Cutting tools
Operations begin
September 2005 (planned)
Organic EL displays
Operations begin
December 2005 (planned)
40
Kyocera Group Mid- to Long-term Strategy
Become a “creative company that
continues to grow in the 21st century”
century”
Strategy: Promote “high
high--value
value--added diversification”
diversification”
FY3/
FY3/’
’07 onward
FY3/’07
Achieve prepre -tax income ratio over 15%
Make each business valuable and maximize contribution from new businesses
b usinesses
FY3/
FY3/’
’06
FY3/’06
Achieve prepre -tax income ratio over 10%
Invest heavily in profitable businesses and launch new businesses
businesses
41
Evolution of Communication Systems Equipment Business Division
’93
PHS
94
Development
95
96
97
98
99 2000
01
02
03
04
DDI Pocket service
commencement
WILLCOM
05
06
WILLCOM established
IP
DDI Pocket base stations and handsets
Sophistication
China (ZTE䋬Lucent) base stations and handsets
China
Taiw an (FITEL) base stations and handsets
Vietnam, India, Russia, Bangladesh
WLL
EV-DO
The Philippines (PLDT), UAE (Etisalat), Ethiopia (ETC)
Thailand (TOT)
KDDI 1xEV-DO base stations
Frequency
reorganization
Rev. A
Development
Australia (PBA),
South Africa (WBS),
Ghana, Azerbaijan, etc.
Sophistication
Japanese market
iBurstT M is a trade mark of ArrayComm, Inc.
42
Initiatives in Japanese PHS Market
’93 94 95 96
97
98 99 2000
01
02
DDI Pocket
03
04
05
06
WILLCOM established
service commencement
PIAFS
64k PIAFS
1x Packet
4x Packet
8x Packet
IP
DDI Pocket base stations and handsets
Development
AH-K3001V
Handsets
Handsets
Base
Base stations
stations
Sophistication
R&D for next-generation PHS
Upcoming handset
Concept phone
Telemetering
terminal
High performance base station
43
Initiatives in Chinese PHS Market
PHS engines
Handset examples
Total shipments: 17 million units
PHS base stations
G3 Multi
G3 Multi-e
G3 Multi SP
G3-e
Total shipments: 300,000 units
Packet Communication
August 2005
Qingdao PTT service start
October 2005
Quanzhou PTT service start
Packet server
44
Strategy in Chinese PHS Market
Past
Past
Device
Present
Future
Future
W
NE
Device development
Upcoming device development
W
NE
Packet engine launch
PHS engines
and handsets
W
NE
PHS engine
PHS engine supporting PIM
W
NE
End products (packet application)
W
NE
Value-added
Value-added services
services
Diversification
Diversification
Sophistication
Sophistication
Packet card (PCMCIA)
Infrastructure
Base station
W
NE
Packet
Packet-exclusive base station
W
NE
Packet server
45
iBurst™ Equipment
Wireless broadband system befitting the broadband era
Antennas
Base Stations
Features
1. High data rate
2. High bandwidth efficiency
3. Supports VoIP
4. Wide service area
5. Simple connection to
internet network
Built for exposed conditions - no air conditioner
or special enclosure required
User Terminal
Desktop type
Equipped w ith ethernet
and USB port
Card type
PCMCIA type II
46
iBurst™ vs Other Systems
iBurst™ vs WiFi
Speed
Broadband
iBurst™ Positioning
802.16ad
WiFi
WiFi
Disadvantage
9 Can cover w ide
area w ith single
base station
9 Peak trans mission
rate
802.20
802.16e
Cable/DSL
Cable/DSL
Satellite
Satellite
Narrowband
802.11abg
MMDS/LMDS
MMDS/LMDS
Advantage
iBurst™ vs Mobile Phone
802.15
Bluetooth
Bluetooth
UWB
UWB
3G
3G
3G
3G
2.5G
2.5G
2.5G
2.5G
Dialup
Dialup
Fixed
WCDMA
CDMA2000
Local Area
GPRS
GSM
2G
2G
2G IS136
2G
IS95
Advantages
9 High effective
transmission rate
9 High bandw idth
efficiency per
base station
9 Low base station
installation cost
Disadvantages
9 High speed
movement
(express trains
etc.)
Wide Area
Coverage
47
Development Progress of iBurst™
Azerbaijan
Sep. 2005
Commercial Service
Trial Completed
Ghana
Aug. 2005
Under Trial
South Africa
Nov. 2004
Australia
Mar. 2004
Under Negotiation
48
Development Progress of iBurst™ ~ PBA, WBS
PBA (Australia), WBS (South Africa) currently provide services in major cities ;
plans to expand to suburbs
PBA Total
ട౉⠪⚥⸘
Subscriptions
Darwin
PBA
PBA
Central urban
service areas
Brisbane
Expand to suburbs
Perth
Sydney
Canberra
Adel aide
Melbour ne
DESKTOP
Hobart
Service Areas
Sydney
Card
Apr.
May
June
Jul.
Aug.
Sep.
Oct.
Nov.
Dec.
CY’04
Melbourne
Brisbane
Jan.
CY’05
Canberra
ട౉⠪⚥⸘
WBS Total
Subscriptions
WBS
WBS
Pretoria
Central urban
service areas
Johannesburg
Expand to suburbs
Durban
Capetown
DESKTOP
Johannesburg
Card
Oct.
Durban
Capetow n
Pretoria
CY’04
Nov.
Dec.
Jan.
CY’05
49
Sales Forecast of Communication Systems Equipment Business
Other
iBurst
Overseas PHS
Japan PHS
FY3/’04
FY3/’05
FY3/’06 (Forecast)
50
Trend of market drivers and Business Vision
Optical broadband and ubiquitous networks
Flip chip packages
• Digital entertainment equipment
(games digital TVs, STBs, etc.)
• Mobile phones handset
• Mobile AV equipment
• Digital still cameras
• Car navigation system
Broadband
SiP//Micro cards
SiP
Internet
• Mobile phones handset
• Digital still cameras
• Mobile music players
• Servers/routers
• Advanced PCs
Flip chip packages
51
Market Needs and Strategic Products
Keyword: network ὉὉὉ High performance, miniaturization, ecoeco-friendly
Requirements for High-speed data processing
High
Digital entertainment equipment
(game consoles, digital TVs, etc.)
Ὁ Large image processing
Ὁ High-speed communications network
Ὁ Miniaturization
Ὁ Communications network
Digital
still
camera
Flip chip package
• MPU
• Graphics
• Chipset
Micro card
• Small HDD
SiP substrate
• Logic + memory
Ὁ High performance, multifunctional
Ὁ Various media, slim
Ὁ Communications network
Mobile AV
equipment
Ὁ High capacity
Ὁ Small, slim
Requirements for smaller and slimer size
Mobile phone
High
52
Greater Sophistication in Organic Packages
Via density (Index: via count/unit area)
High
Flip Chip Package
Increase via count
15 Make line pitch narrower
For
next--generation
next
games
MPU, GPU, CS
For multimulti-pin ASIC
MPU for PC
10
5
GPU for PC
Low
100
Large
80
60
40
Line pitch (㱘m) ίline width and space)
Small
* KYOCERA SLC Technologies (KST) estimate
53
Market Strategy for Next-Generation Game Consoles
Aim to create business with three major game makers
Market for sophisticated flip chip packets will expand rapidly in
in line with
growing market for nextnext-generation game consoles
(1,000 units)
ᵓᵎᵊᵎᵎᵎ
ᵒᵎᵊᵎᵎᵎ
ᵑᵎᵊᵎᵎᵎ
Next-generation game consoles
ᵐᵎᵊᵎᵎᵎ
ᵏᵎᵊᵎᵎᵎ
ᵎ
ᵡᵷ ᵐᵎᵎᵑ
Existing game consoles
ᵐᵎᵎᵒ
ᵐᵎᵎᵓ
ᵐᵎᵎᵔ
ᵐᵎᵎᵕ
ᵐᵎᵎᵖ
* KST estimate
54
Trends in Digital Entertainment Equipment Market
(Digital TVs, DVD Recorders, STBs, Game Consoles)
Increasing demand for flip chip packages for highhigh-performance semiconductors
CY 2004
CY 2008
Ṳ Digital TVs
(12 million units ḷ 45 million units)
Ṳ DVD recorders ( 9 million units ḷ 51 million units)
CY 2004
CY 2008
Ṳ STBs
Ṳ Game consoles
(million units)
250ᵎ
120%
200ᵎ
126%
130%
150ᵎ
119%
100ᵎ
50ᵎ
0ᵎ
* KST estimate
CY2002
2003
2004
2005
2006
2007
2008
55
Production Site Strategy
Handle high volume items at Ayabe and various
items in small/mid volume at Kagoshima and Yasu
New Plant (Ayabe)
Existing Plants (Kagoshima and Yasu)
Production
Item
High volume items
Various items in small/mid volume
Role
Specialize in production activities
Design, technology development
and customer interface
Plant
56
Outline of New Plant (Ayabe)
Boost sales and profitability utilizing a statestate-of
of--art mass production line
High quality, UltraUltra-streamlined, High volume production
Commenced production: June 2005
Total floor area: 151,608 m2
Building area: 8,400 m2 (140X60m)
3 floors
Site areas: 25,200 m2
57
Future of Organic Packages
Density index
Increase Semiconductor Chip Density
Need to Further Increase Density of Organic Packages
Semiconductor chip
Organic material wiring board
Innovative Development through New Technologies
Propose Future Markets
Develop market needs ahead of users
z Propose creative ideas to market
Discover market direction through close contact with many users
Anticipate future market and perfect necessary technologies
z Conduct product R&D
z Develop production technology
58
High Density to Accept Semiconductor Backend Wiring
Example of minute package wiring
Semiconductor chip
internal wiring
0.1
0.3
1
3
7㱘m
5
5
7
10
15
Package substrate
wiring
15
20
25
35
50
Unit:㱘m
Board wiring
100
59
Target of KYOCERA SLC Technologies Corp.
Make important contribution to progress of ubiquitous network society
society as a
specialist in developing technology for highhigh-density organic packages and substrates
(Production index)
Dramatically boost
production capacity
z Install state of art production line at
ᵓᵎᵎ
ᵒᵎᵎ
ᵑᵎᵎ
new plant in Ayabe
z Bolster production lines at existing
ᵐᵎᵎ
plants in Kagoshima and Yasu
ᵏᵎᵎ
ᵎ
3/’04
(Result)
3/’05
3/’06
3/’07
(Result) (Forecast) (Target)
3/’08
(Target)
(Based on FY3/’04 standard of 100)
60

Three Months Ended June 30, 2005

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