Business OverviewReview of Operations

The TAIYO YUDEN Group is comprised of two business segments: "Electronic Components" and "Optical Media and Others." The "Electronic Components" business manufactures and sells capacitors, inductors, SAW/FBAR devices and other electronic components. The "Optical Media and Others" business manufactures and sells optical media products and engages in other businesses.

During the fiscal year ended March 2012, demand for smartphones and tablet PCs was strong. In contrast, efforts by PC and LCD panel manufacturers to adjust inventories contributed to a drop in demand for electronic components. The Electronic Components business expanded its production capacity for super-high-end products such as small, high-capacitance multilayer ceramic capacitors and SAW/FBAR devices. This was done to maintain a steady supply of products used in smartphones, which, in particular, continued to experience increases in demand. In the Optical Media and Others business, structural reforms made during the year ended March 2011 helped to increase efficiencies in the Optical Media business with the objective of producing positive profit.

Nevertheless, total consolidated sales for the fiscal year ended March 2012 declined by 12.6% year over year, to ¥183,795 million. The Company posted an operating loss of ¥8,010 million (compared with a ¥8,792 million profit in the previous year). Extraordinary items included expenses related to restructuring, such as a special extra retirement payment for the solicitation of voluntary retirement, as well as the depletion of deferred tax assets. As a result, the net loss for the period was ¥21,599 million, compared with a ¥5,506 million net loss in the year ended March 2011.