President's Message

The Shinko Group achieved consolidated net sales amounting to 140,923 million yen for the period under review (up 8.5% year on year). Although certain products were subject to inventory adjustment in the second half of the period, a number of efforts contributed to sales, such as putting greater emphasis on preparing high-volume production systems for new products in the main flip-chip type package line-up. With regard to earnings, we established a comprehensive set of measures to promote improvement and higher efficiency centered on the entire Group’s production reform activities while cutting expenditures.
Nevertheless, lower product prices resulting from heightened competition, together with the strong yen and weak U.S. dollar, affected results. We recorded consolidated recurring income of 4,828 million yen (down 11.1% year on year) and net income of 2,404 million yen (down 24.6%).

The outlook for the semiconductor industry is an ongoing improvement in market conditions. The market is expected to grow, because of rising demand in developing countries for electronics devices such as PCs and digital home electronics applications, as well as growth in the market for multifunctional personal devices such as smartphones. However, the competitive environment will remain severe as companies battle to survive the expected demand shift to low-cost products and the subsequent further downward pressure on product prices.
Additionally, instability in the supply of parts and materials caused by the Great East Japan Earthquake has a wide range of effects both at home and overseas that cannot be ignored. This situation is expected to continue for the foreseeable future.
The Shinko Group is currently emphasizing intensive and effective investment of corporate resources in its development/commercial production systems for products that are expected to record continued growth in the future, so that it can bring to market products that are highly competitive with regard to function, performance, cost, and quality. This effort includes planning the expansion of our Takaoka Plant (Nakano City, Nagano Prefecture) to reinforce our production capability for flip-chip type packages for which—as precision mounted substrates for PCs, servers, and other such equipment—increased demand is expected, and to ensure that we can handle next-generation products. Moreover, to achieve “Progress without Limits” in the fiercely competitive semiconductor market, we are aiming to reinforce the production reforms that the entire company has adopted and produce high-quality products with enhanced productivity. We are also working hard to construct a production environment that is capable of manufacturing superior products while constantly aiming to improve and evolve. With this as our linchpin, we intend to leave no stone unturned in establishing a strong company structure capable of enduring changes in market environments.