Message from the Management

TAIYO YUDEN continues to meet the challenges of transforming itself, aiming to become an excellent company that enjoys the trust and highest regard from our customers.

TAIYO YUDEN remains focused on its goals to be an excellent company as viewed by our shareholders through enhancing corporate value, to be recognized as a strategic partner by our customers, to become a company in which employees take pride, and in being an entity that earns public respect. All of the companies under the globalizing TAIYO YUDEN Group share in this common aspiration and are committed to working as a cohesive whole to become an enterprise trusted by all stakeholders, including shareholders, customers, employees and local communities.

Overview of the Year Ended March 2015

In the fiscal year ended March 2015, we achieved significant progress towards meeting our growth strategies. We made substantial advances with a vast improvement in the Company's sales composition by making our super high-end products a greater part of what we provide to the market. This is particularly true with our smartphone components, and through increased sales in the automobile, industrial equipment, and other focus markets.

The growth of our super high-end products as part of the total sales composition is in line with our overall strategy, which is to develop, manufacture and sell products that closely align with our customers and the markets we serve. We also realized an additional boost in results from a favorable yen rate.

As a result, the Company achieved increases in both sales and profit in the consolidated fiscal year ended March 2015, with net sales rising 9.1% year on year to ¥227.0 billion, operating income increasing 15.8% to ¥13.1 billion, and net income increasing 56.2% to ¥10.9 billion.

The Company continues to see opportunities and we are working diligently to build on these successes and take the next major step forward to ensure the best possible results by strengthening our supply capabilities. To realize this potential, we will shift to a more aggressive stance on capital investment to ensure we take full advantage of growing demand in the end markets we serve, such as smartphones and other equipment, and to help effectively respond to the trends in the automotive electronics market.


We are strengthening our fi ve bases and implementing three initiatives with the goal of reaching net sales above ¥300 billion, generating record-high operating income, and raising ROE above 10%.

The TAIYO YUDEN Group will continue to advance actions to strengthen our position across our market, product, customer, and finance bases. To fortify the market base, we will diversify our market base and rebalance our product offerings to help avoid the highly volatile changes in demand we continue to see in the markets for consumer, information, and communications products. We are developing business not only in growth devices like smartphones but also in new fields such as automobiles and industrial equipment. To strengthen the product base, we will build our supply system for high-reliability automotive electronic components. Our actions will make us fi rst-to-market with super high-end products in the rapidly evolving device segment. To bolster the customer base, we will work to ensure the Company is the preferred strategic partner of our customers. To reinforce the finance base, we will continue to improve our positive net cash*1 while stepping up ambitious investments to support our growth.

This year we have added human resources as the fifth base to be strengthened. We have initiated a global human resources initiative, increasing our force of field application engineers (FAEs) from 120 to 180. This will augment our market-oriented product development efforts and grow sales.

These efforts are key in assuring we achieve our goals for sales of super high-end products to comprise over 50% of total sales and focus market sales over 30%. This will provide the necessary foundation for attaining our medium term targets of over ¥300 billion in net sales, record-high operating income*2, and ROE above 10%.

*1. Net cash is cash and deposits minus interest-bearing debts.

*2. The current record is ¥35.3 billion in operating income in the fiscal year ended March 2001.

Developing Focus Markets

We see substantial business opportunity in the high-end smartphone and automotive electronics markets.

Growth in smartphone sales worldwide is expected to expand by double digits in 2015. Although this pace will not continue indefinitely, we expect unit production of high performance handsets for the long-term evolution (LTE) protocol to be 2.5 times the 2014 level in 2017. In addition, higher frequencies and narrow adjacent bandwidths are becoming increasingly important as devices become more sophisticated and communication volume increases. This will drive demand for our FBAR and SAW filters* higher. In addition, development of increasingly high-performance, thinner, and more energy-efficient CPUs will also mean growing demand for ultra-compact, thin, and high-capacity multilayer ceramic capacitors (MLCCs) and compact, large current inductors.

For our automotive electronic components, we have built on our foundation of high quality products and filled out our lineup of highly reliable products meeting requirements for high temperature resistance and long operating life. We are currently stepping up efforts to expand this business, leveraging our position as an approved supplier for Tier 1 automotive electronics makers. While automobile shipment volume is expected to grow 4?5% annually, the increasing use of electronic circuitry and the shift to electric and fuel cell vehicles are projected to expand the automotive electronics market by 70% from 2012 to ¥30 trillion in 2020. Going forward, we will work to capture a healthy portion of the opportunities created by these major trends in smartphones and automotive electronic components based on standards we have set for investment returns, with the aim of increasing our supply capabilities for super high-end products to maximize earnings.

* Film bulk acoustic resonator (FBAR) and surface acoustic wave (SAW) filters are used in mobile communications devices to filter the electrical signals of band frequencies and allow the reception and transmission of specific frequencies. FBAR filters provide better performance characteristics for higher frequencies than SAW filters.

Shareholder Return Policy

We plan to increase the annual dividend payment to enhance shareholder return.

Returning profits to shareholders is a management priority, and we plan to raise our dividend payment to reflect our earnings forecast. The previous fiscal year, prioritizing the establishment of a stable and sustainable earnings structure and improvement of our financial position, the Company kept total dividends at ¥10 per share, despite the earnings growth achieved during the year. For the fiscal year ending in March 2016, we will continue to fortify our financial foundation to maintain a positive net cash position while making the necessary investments for growth. Management has decided the time is right for raising the dividend payment to maintain our target for a 30% total return ratio. Thus we plan to raise our annual dividend per share to ¥15, comprising an interim dividend payment of ¥5 and year-end dividend payment of ¥10.

Shoichi Tosaka
Shoichi Tosaka
President and Chief Executive Officer