Electronics Related Products

Transcription

1 REVIEW OF OPERATIONS Electronics Related Products Anisotropic conductive films for displays Slurry for chemical mechanical planarization Sales in this segment for fiscal 2005 increased 10.7 percent year-onyear to billion, and operating income increased 18.1 percent to 37.7 billion. Electronics Related Products (Billions of yen) Change (%) Segment sales % Operating income Assets Depreciation and amortization of tangible and intangible fixed assets Additions to tangible and intangible fixed assets (Years ended March 31) Hitachi Chemical introduced a device within the Company for evaluating slurry for chemical mechanical planarization of φ300mm silicon wafers to increase the speed of development and expanded production facilities for die bonding materials in response to increased demand for flash memory. To meet the ongoing rise in demand in China, Hitachi Chemical established a production base for epoxy molding compounds for semiconductors in Suzhou, Jiangsu Province, China and worked to reinforce the local production network for photosensitive dry films and advanced copper-clad laminates for printed wiring boards (PWBs). Other initiatives included aggressive efforts to expand sales into overseas markets for carbon anode materials for lithium ion batteries, electromagnetic interference (EMI) shielding films for plasma display panels (PDPs) and other high-value-added products. KEY INITIATIVES IN FISCAL 2005 SALES OF MAIN PRODUCTS Semiconductor and Display Related Materials In semiconductor-related materials, sales of epoxy molding compounds increased due to an increase in overseas sales of halogen-free products and products compatible with lead-free soldering, which have less environmental impact. Sales of slurry for chemical mechanical planarization of silicon wafers increased substantially for copper wiring in high-speed devices. 18 Hitachi Chemical Co., Ltd. Annual Report 2006

2 Die bonding films for semiconductors EMI shielding films for PDPs Photosensitive dry films for PWBs Sales of die bonding materials, which combine dicing tape functions to contribute strongly to shortening the manufacturing process, continued to grow significantly due to adoption by a broad range of customers. In display-related materials, stronger demand from digital consumer appliance manufacturers in Asia supported substantial growth in sales of anisotropic conductive films for displays, despite intensified price competition. Sales of EMI shielding films for PDPs increased substantially due to a surge in domestic and overseas demand. Printed Wiring Boards and Related Products Sales of multilayer PWBs for semiconductor testers increased, but overall sales of PWBs were flat due to a decline in sales of flexible PWBs caused by the overseas shift of customer production bases and a decline in sales of multiwire boards because of lower demand. In printed wiring board related products, sales of copperclad laminates for heat-resistant PWBs increased due to higher sales for use in semiconductor package substrates. Sales of photosensitive dry films for PWBs expanded on steady efforts to meet increased demand in Asia. Others Sales of carbon anode materials for lithium ion batteries increased due to higher demand for use in mobile phones and notebook computers. In the capacitor category, strong sales of liquid crystal display (LCD) televisions and other factors supported an increase in sales of aluminum electrolytic capacitors, which are used in applications such as inverters. However, a drop in demand for digital camera applications led to a decline in sales of tantalum capacitors, resulting in an overall decrease in sales of capacitors. Hitachi Chemical Co., Ltd. Annual Report

3 REVIEW OF OPERATIONS >> Advanced Performance Products Solder resist for chip on film (COF) Disc brake pads Sales in this segment for fiscal 2005 increased 8.3 percent year-on-year to billion, and operating income increased 12.1 percent to 14.9 billion. 20 Advanced Performance Products KEY INITIATIVES IN FISCAL 2005 Hitachi Chemical shifted toward higher-value-added products, reorganized low-profit businesses and upgraded production methods to improve its profit structure, and continued to create new technologies and businesses. In addition, the Group adjusted product prices to reflect the sharp rise in raw material costs, and worked to expand overseas sales of high-valueadded products such as adhesive films. Hitachi Chemical Co., Ltd. Annual Report 2006 (Billions of yen) Change (%) Segment sales % Operating income Assets Depreciation and amortization of tangible and intangible fixed assets Additions to tangible and intangible fixed assets (Years ended March 31) SALES OF MAIN PRODUCTS Industrial Materials Sales of electrical insulating varnishes for applications such as protecting the surfaces of LCD circuitry expanded steadily in Japan and overseas, while housing-related and other sales of acrylic resin, which is mainly used in paints, were firm. Sales of shell molding resins increased due to greater demand for use in automotive applications. Sales of expandable polystyrene beads also increased as a result of factors such as greater demand for use in automobile components and growth in sales of products that contain recycled materials. The unsaturated polyester resin business was transferred to a joint venture on April 1, Carbon and Ceramics In ceramics and related materials, sales of components for semiconductor manufacturing equipment and automobile water pumps grew steadily. Due to a steady increase in sales volume that offset the significant impact of escalating price

4 GSO single crystal scintillators LCD optical sheet protective films Batteries for automobiles competition, sales of gadolinium silicon oxide (GSO) single crystals for positron emission tomography (PET) medical equipment and other applications remained at the same level as in the previous fiscal year. In carbon and graphite products, sales of carbon friction materials increased as a result of expanded customer demand, and although sales of carbon brushes declined due to a drop in demand for railcar use, overall sales of carbon and graphite products increased. Automotive Parts Production increases by major customers led to growth in sales of plastic molded backdoor modules and other automotive molded products, and sales of disc brake pads increased due to expanded use by customers. During fiscal 2005, Hitachi Chemical increased its equity stake in a joint venture in Thailand and made it a consolidated subsidiary. Advanced Functional Films In addition to expanded sales of adhesive films, which are used to protect the surface of fiber optic panels for LCDs, sales of cross-linked foamed polyethylene for roof and pipe insulation increased in conjunction with the growth of capital investment by the private sector. Others Sales of powdered metal products increased as sales of automobile engine components with superior fuel efficiency and high-performance car air conditioners grew steadily. Sales of rechargeable batteries increased due to higher capital investment demand in the telecommunications industry and greater adoption in new-model cars. Hitachi Chemical Co., Ltd. Annual Report

5 REVIEW OF OPERATIONS >> Housing Equipment and Environmental Facilities Prefabricated bathroom units for detached houses System kitchens Sales in this segment for fiscal 2005 increased 2.6 percent year-on-year to 86.6 billion. Operating income decreased 45.0 percent to 0.9 billion. Housing Equipment and Environmental Facilities KEY INITIATIVES IN FISCAL 2005 (Billions of yen) Change (%) Segment sales % Operating income (45.0) Assets (2.7) Depreciation and amortization of tangible and intangible fixed assets (6.2) Additions to tangible and intangible fixed assets (Years ended March 31) Hitachi Chemical worked to strengthen its core bathroom equipment business and the kitchen business, which have strong synergy, and shifted its focus from a price-oriented market to a feature-oriented market by developing and expanding sales of new, primarily middle- and high-grade, products. In addition, the Group continued to promote broadbased alliances with other companies in the housing equipment field. SALES OF MAIN PRODUCTS Sales of heat-pump water heaters that use a natural coolant with improved energy efficiency for all-electric homes increased significantly, while sales of compact kitchens rose steadily with an increase in construction of housing complexes. However, sales of prefabricated bathroom units decreased from the previous fiscal year reflecting a decline in single-family home construction and heightened price competition in products for housing complexes. Sales of system kitchens also fell as a result of a slump in the single-family home market, and sales of domestic wastewater treatment systems declined year-on-year due to lower demand and other factors. 22 Hitachi Chemical Co., Ltd. Annual Report 2006

6 Toilet seats with warm water cleansing and bidet functions Vanity tables Domestic wastewater treatment systems Mist shower nozzle Natural Refrigerant Heat Pump Water Heaters: Enhanced Business Expansion Natural refrigerant heat pump water heaters use CO2 as a coolant that draws in heat from the surrounding air and uses this heat energy to make hot water. Highly efficient and economical, they use one-third of the electricity required for conventional electric water heaters. Hitachi Housetec Co., Ltd. is strengthening business for this product in response to heightened environmental awareness and the trend toward all-electric housing. In fiscal 2005, we launched a model with a hot water tank just 435mm thick, making it easy to install in urban housing with narrow lots. We also added a model with a mist shower option, which offers health and beauty benefits. The Yuki Works of Hitachi Housetec Co., Ltd. responded to increasing demand by expanding production of natural refrigerant heat pump water heaters. To date, we have been selling this product for detached housing, and plan to begin offering a new product for housing complexes during fiscal 2006 to further expand sales. Hitachi Chemical Co., Ltd. Annual Report