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, and other associated fields that support people’s health. The semiconductor market is anticipated to keep expanding, as semiconductor usage continues to broaden.
Moreover, big data, artificial intelligence (AI), 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 progress of semiconductors will continue as a key technology for achieving this potential.
The Shinko Group is committed to 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. We will strive to provide products and services with high value for customers, and to support their success and maintain their trust, by accurately grasping customers’ needs and ensuring a high level of quality, cost, and delivery performance. Through these initiatives, we will pursue our own development and growth.
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, 2018

During the fiscal year under review, the Shinko Group continued to focus on investing management resources in growth markets, enhance and strengthen production systems, and develop and begin mass-producing new products that answer market needs. Accordingly, orders increased substantially for ceramic electro static chucks for semiconductor manufacturing equipment, revenue from lead frames increased, mainly in sales for automobiles, and sales of plastic BGA substrates for memory and other uses expanded significantly.
On the other hand, sales of IC assemblies for highend smartphones were greatly impacted by demand fluctuations and revenue from our flip-chip type packages decreased due to shrinkage of the PC market. As a result of these factors, consolidated net sales for the period under review increased 5.2% year on year to 147,113 million yen. The trend toward a strong yen and weak U.S. dollar in the fourth quarter had an impact on earnings. Nevertheless, the growth in revenue from high-value-added products resulted in consolidated recurring income of 5,730 million yen (up 65.2% year on year). Profit attributable to owners of parent increased 21.9% year on year to 3,664 million yen.

Outlook

With regard to the future of the semiconductor industry, demand for semiconductors is anticipated to continue rising significantly in the automotive market, where the trend of built-in electronic devices is expected to increase with the progress in self-driving technology, and in the IoT-and AI-related market, where applications are accelerating in various fields. On the other hand, many companies are expected to enter these growth fields and competition is forecast to intensify.
Given this environment, the Shinko Group will double down on its efforts in pursuit of new growth by focusing investment of management resources in markets with high growth potential, based on the semiconductor packaging technology we have cultivated thus far.
We plan to expand production capacity. Anticipating higher demand for high-performance semiconductors, including for servers, we will make capital investments to reinforce production lines at the Takaoka Plant in Nakano City, Nagano Prefecture, for next-generation flip-chip type packages that can meet the growing sophistication and speed of semiconductors. We will also outfit a new plant that came online at the Arai Plant in Myoko City, Niigata Prefecture, with a mass production system for ceramic electro static chucks. Additionally, with a view toward future development, we will further strengthen our business foundation by focusing on development, mass production, and sales promotion of new products for the automotive market, which is seeing a greater shift toward built-in electronics, and the memory market, which is driving growth in the semiconductor market.
To achieve “Progress without Limits,” the Shinko Group will strive to enhance and strengthen its development, manufacturing, and sales functions, always starting with customer needs, and translate market growth and expansion into our own growth through the provision of products and services that have high value for customers.

June 2018
Noriyuki Toyoki
Chairman, President and Representative Director

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