SHINKO ELECTRIC INDUSTRIES CO.,LTD.
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I would like to take this opportunity to extend my best wishes and to thank everyone for the exceptional support given to us.
Semiconductors are vital components that act like the brains in automobiles with built-in electronics, which is a trend that is progressing increasingly, and applications related to the Internet of Things (IoT)—which is envisioned to expand rapidly—as well as devices used in the medical, healthcare, and other associated fields that support people’s health and lives. The semiconductor market is anticipated to keep expanding, as semiconductor usage continues to broaden. Moreover, big data, artificial intelligence, and other advanced technologies are changing the structure of the economy and society. They have the potential to create innovation on a different order of magnitude from before. It is expected that the innovation of semiconductors will continue as a key technology for achieving this potential.
According to the needs of the times, the Shinko Group has developed a business as a company that provides total solutions in semiconductor post-processing through its development and advancement of a wide range of elemental technologies for semiconductor packaging. Going forward, we will seek to establish a more solid business foundation by developing highly competitive products and continually pushing manufacturing innovation forward, based on our interconnection technology that brings the marvelous features and benefits of semiconductor devices into peoples’ lives.
Through practice of the “SHINKO Way,” which sets out the Shinko Group’s corporate philosophy and policies, we are committed to running our business so that we remain a company that is needed by society, while continually boosting our corporate value and contributing to the sound development of society.

Business Results for the Fiscal Year Ended March 31, 2017

During the fiscal year under review, the Shinko Group focused on investing management resources in growth markets, launching new products, and reinforcing its production system. The Group also made an aggressive sales effort and strengthened initiatives to boost productivity. These efforts expanded demand for IC assemblies for high-end smartphones and automobiles and for plastic BGA substrates for memory, and achieved sales growth in lead frames for smartphones and other devices.
On the other hand, sales of our flip-chip type packages remained low for PCs. As a result, consolidated net sales for the period under review declined 2.5% year on year to 139,890 million yen. The decrease in revenue from flip-chip type packages and an ongoing trend toward a high exchange rate for yen had an impact on earnings. Consolidated recurring income was 3,468 million yen (down 65.8% year on year). Profit attributable to owners of parent declined 13.5% year on year to 3,007 million yen.

Outlook

With regard to the future of the semiconductor industry, demand is expected to rise on the back of growth in information and communications technology (ICT)-related markets, and semiconductor usage is expected to expand further, including in the automobile, environmental, energy, and healthcare fields. On the other hand, demand for PCs is projected to decline and the deceleration of smartphone growth is predicted to grow pronounced, as seen for example in fluctuations in demand with the shift to low-priced goods and transitions between product generations. Overall, a harsh business environment is forecast to continue.
Given this environment, the Shinko Group will strive to step up sales promotion by concentrating investment of management resources in markets that are expected to grow in the future, including servers, automotive electronics, and semiconductor manufacturing equipment, based on the Group’s semiconductor packaging technology and product portfolio.
Additionally, in fields where the need for high-performance semiconductors is forecast to increase, such as the IoT, which is expected to undergo rapid market expansion, we will focus on capturing new demand by enhancing our marketing and development capabilities and expanding our technology domains, to commercialize new products. We will also attempt to increase productivity and reliability of products for PCs and smartphones, and forcefully advance the development and launch of next-generation products, among other efforts, to strengthen competitiveness and ensure earnings.
To achieve “Progress without Limits,” the Shinko Group is determined to create a strong company structure that can respond immediately to changes in the market and environmental conditions by continually blazing new trails in manufacturing, technology, and services in the fiercely competitive semiconductor market.

June 2017
Noriyuki Toyoki
Chairman, President and Representative Director

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