致股东、投资者各位

We challenge new growth toward next 50 years by positioning the 50th anniversary as our turning point.

Regarding performance in the 52nd term (the fiscal term ending in December 2014)

While in the previous term (the 51st term) the bottom line was in the red for the second term running and this must have caused you all a great deal of concern, in the 52nd term we were able to keep our accounts in the black.
First of all, let us consider electrical and electronic components business. Following on from the previous term, miniature radio frequency (RF) coaxial connectors used in wireless communications for smartphones, tablets, etc. continued to perform well, in particular seeing increased demand for Chinese local smartphones. SGC (Small Gauge Coaxial) connectors saw increased orders related to notebook computer screens, motherboards, etc., and results exceeded our initial plan. With regard to FPC/FFC connectors, as a result of reduced sales of TVs, cameras, etc., orders for digital home electronics showed little increase, but by expanding the product lineup, we were able to increase orders for computers. Furthermore, components related to hard disk drives (HDDs) also saw increased orders for servers and game machines, etc., and achieved a steady increase in sales.
Next, let us consider automotive components business. While in Japan the influence of the increase in consumption tax was felt in the form of restrained purchasing, performance in the two large automotive markets of China and North America continued to be good following on from the previous term. Since demand for automotive parts increased overall, orders for automotive sensors increased. Furthermore, entry of our own brand of automotive connectors into new product markets progressed, and since the range of car models adopting them expanded, they showed a good trend.
With regard to equipment business, while orders related to peripheral equipment used in the manufacture of semiconductor devices such as smartphones did not increase as much as expected, business was steady overall due to a recovery in orders mainly for molding machines, molds, etc. used in the manufacture of semiconductors for automotive devices.
Taking into general consideration these results, the business environment, etc., the year-end dividend was set to 10 yen per share, a 5 yen increase on the planned amount, and, for the first time in 3 terms, we set the annual dividend to 15 yen (including the interim dividend).

Important points of strategy for the next term (the 53rd term)

Electrical and Electronic Components Business

Attention will continue to be focused on increasing sales of miniature RF coaxial connectors, since it is predicted that, following on from the 53rd term, continued expansion will be seen in the mobile terminal (smartphones, tablets, etc.) market and demand for connectors used in wireless communications will increase. With regard to SGC connectors, since it is predicted that the need for change to high speed communications in the electronics, medical and automotive fields, etc. will further increase, as a pioneer of SGC connectors with superior high speed transmission properties, we will push forward initiatives aimed at new markets. With regard to FPC/FFC connectors, by expanding the small-sized and thin-type product lineups, we will undertake a full-scale development of business for smartphones. Furthermore, we will actively work on new product development of thin-type, high performance Board to Board (B to B) connectors for smart devices such as smartphones and tablets. The B to B connector market is a tough market in which many other competing companies jostle for a share, and we are aiming to expand our share, leveraging distinguishing factors derived from the capacity for product design and production technology which are our strong points. Besides this, with regard to HDD-related components, we aim to expand our share in the HDD market while working to strengthen an optimal-location production system which makes effective use of our group's overseas bases.

Automotive Components Business

Since it is predicted that automobile sales will show a steady trend, increased demand for parts such as automotive sensors can be anticipated. Furthermore, our own brand of automotive connectors are highly regarded for the reliability of their connections under high temperature conditions, which is an issue for LED headlights, and adoption in LED headlight units produced by both domestic and overseas automobile manufacturers is moving forward. Since further growth is predicted in the 53rd term, we will commence full-scale mass production, and we will continue to strengthen business activities targeting Japan, North America and Europe while focusing on the development of competitive new products. In order to firmly take in hand expanding the demand for our own brand of connectors and components like automotive sensors, etc., we will undertake enhancements of our production systems, including enlarging our plants in North America and Yamanashi.

Equipment Business

We will strengthen close-contact-type business in relation to regions and customers mainly in the Asian area, further develop our distinctive original technologies, and move forward with work to increase sales of semiconductor resin molding machines, etc. Furthermore, we will continue work on opening up new fields which apply molding technologies cultivated through our work in semiconductor resin molding machines.

Initiatives to create new business

In the 52nd term we announced, as new initiatives, the development of the ESTORQ torque sensor for the robotics industry and of an earthquake detector which uses a MEMS device.
ESTORQ has seen a large reaction at a variety of exhibitions, and we are receiving inquiries from universities, major manufacturers, etc. Further development is eagerly anticipated. We would like to make a full-scale entry into the robotics industry market, in which rapid growth is anticipated, and intend to spread awareness to more potential users regarding the strengths of ESTORQ, which has realized reductions in both size and cost compared to conventional-type torque sensors.
Furthermore, with regard to MEMS devices, we will undertake development of products needed in a wide range of industries, for example the electrical appliances, communications, automobile and medical industries, and aim to develop them into a pillar of future business. We have set up a system for MEMS device development at the Fukuoka Ogori Plant, and intend to give the next product development project a firm push in the back.

We will put all our energy into successful achievement of plans for the 53rd term also, and we would like to ask for your continued kind support for our group as we move into the future.

KONISHI Hideki
President
Dai-ichi Seiko Co.,Ltd.