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Issues to be addressed

The Group is promoting structural reform consisting of constitutional improvement measures and growth strategies, with an eye toward effecting the Mid-term Management Plan ending the fiscal year ending March,2015. As a growth strategy, the Group will offer highly marketable and sought-after super high-end products in a timely manner for high-growth devices such as smartphones and tablet PCs. In addition, the Group is working to boost its corporate value by targeting expanded sales in promising markets such as industrial equipment, automobiles, healthcare, and energy and environment. The Group is also making continuous efforts for improvement in its financial strength and asset efficiency. As a target management indicator, the Group is focusing on cash flow management, with a goal of achieving consolidated return on equity (ROE) greater than 8% along with positive single-year cash flow and positive net cash in the fiscal year ending March 31, 2016.

The Group is being committed to improvement in profits and financial strength, taking measures by product as stated below:

1.Capacitors

The Group will enhance its super high-end products, both ultra-small multilayer ceramic capacitors and cutting edge products of various sizes, for high-growth devices such as smartphones and tablet PCs, and streamline systems in response to expansions in demand. Furthermore, product lineups for markets of high-quality products, such as industrial equipment, automobiles, and healthcare will be strengthened. In the high-capacitance zone over 100μF, the Group will promote an expansion of the market for its multilayer ceramic capacitors by proactively expanding into the market for electrolytic capacitors, with an eye to further growth. Meanwhile, as for its production systems, the Group will pursue highly efficient production at all of its production sites, while striving to make the maximum use of its overseas manufacturing base by accelerating overseas development of high-end products which had previously been produced in Japan.

2.Ferrite and applied products

In the areas of multilayer chip inductors and winding inductors, the Group will accelerate development of super high-end products that are more suited to customers' needs than ever before. In particular, with regard to power inductors the Group will strengthen its line-up of "MCOILTM" products employing new metallic materials that enable much smaller size and larger current, strategically launching them into the market and expanding relevant production capacity. Meanwhile, as with capacitors, the Group will strive to make the maximum use of overseas production sites and achieve highly efficient production.

3.Integrated modules & devices

A change in the business structure, from the previous business model centering on modules to a new model centering on integrated modules & devices, is currently being implemented. The Group will develop the high-frequency products business with SAW/FBAR technology at its core, proactively launch into the market for super high-end products using EOMIN®, an embedded-parts multilayer wiring substrate which was invented with the Group's unique technologies, and strengthen the power supply business that includes regeneration systems for the energy market. The Group will strive to establish a production system for SAW/FBAR devices, responding to the expansion of the smartphone and tablet PC markets and the increase in the number of installed devices.

4.Other electronic components

As products such as polyacene capacitors and lithium ion capacitors are developed, the Group will find applications in high-tech fields, and develop into the energy field to expand sales. In particular, the Group is strengthening its products for back-up power supply applications with high potential for future growth, such as devices that are used in smart meters, and centralized meter systems.

5.Optical media

Regarding CD-R, DVD-R, and BD-R products for consumer use, the Group is promoting a shift in business model in order to ensure stable earnings, while moving forward with production system optimization in response to a shrinking market. In particular, the Group is promoting the creation and development of a market for archive-related products that leverage the Company's strength in delivering high quality products.