Results of Operations for Fiscal 2021
(Ended March 31, 2022）
Nihon Dempa Kogyo Co., Ltd.
May 27, 2022
[Note]
Statements made in this presentation with respect to our current plans, estimates, strategies and beliefs and other statements that are not historical facts areforward-looking statements about our future performance.
These statements are based on management‘s assumptions and beliefs in light of information currently available to it. We caution that a number of importantrisks and uncertainties could cause actual results to differ materially from those discussed in the forward-looking statements, and therefore you should not place
undue reliance on them.
You also should not rely on the belief that it is our obligation to update or revise any forward-looking statements, whether as a result of new information, future
events or otherwise. Risks and uncertainties that might affect us include, but are not limited to, fluctuation of currency exchange rates, overall supply andcustomer demand in the industry, product development and production capacities, performance of affiliated companies, and other risks and uncertainties.
Copyright © 2022 Nihon Dempa Kogyo All Rights Reserved1＜Contents＞

１．Results for FY2021 (Ended March 31, 2022)

２．Outlook for FY2022 (Ending March 31, 2023)
３．Medium-Term Management Plan
(FY2022ーFY2024)(1) Summary(2) Business Strategies– As of March 10, 2022 –Presented by Hiromi Katoh,
Representative Director and President
Copyright © 2022 Nihon Dempa Kogyo All Rights Reserved

21. Results for FY2021 (Ended March 31, 2022)

Consolidated Financial Results (Fiscal year)◼ Operating income (excluding temporary factors) turned to a positive ¥4.5 billion for FY2021◼ The operating income ratio improved markedly to 10.0% (excluding temporary factors)(Million yen)

FY2020ResultFY2021ResultYoY

FY2021
Outlook(as of Nov. 9)

Net Sales

39,19545,408+6,21344,500Operating Income
Operating Income Ratio

2,844
7.3％

5,180
11.4%

+2,336
+4.1%

4,900
11.0%

Operating Income/Loss

▲443

4,536

+4,979

4,255

▲1.1%

10.0%

+11.1%

9.6%

Income before Income Tax

2,592

4,920

+2,3284,400

Net Income*1

1,976

5,455

+3,4794,000

Exchange Rate (against the U.S. dollar)

106.17112.86+6.69

110.97(Excluding temporary factors)

Operating Income/Loss Ratio*1: In FY2021, due to the recording of deferred tax assets of ¥1,917 million, the Income taxes–deferred of ¥1,665 million was recorded.

<Temporary factors> *2
Cost of structural reform▲1,1181,136

Grant from Suzhou government
SAW device business related revenue

4,406

Temporary factors

3,287*2: Income shown as a positive figure, cost shown as “▲”
Copyright © 2022 Nihon Dempa Kogyo All Rights Reserved

▲492

644

3

1. Results for FY2021 (Ended March 31, 2022)

Sales by Application (Year on Year)◼ Sales vastly increased, particularly for automotive electronics(Billion yen)
Automotive electronics

Industrial equipment

FY2020Net Sales
FY2021

YoY

18.3

22.5

+4.3

Demand has risen sharply since 2Q FY2020.
Strong orders from Tier 1 manufacturers continues in FY2021.

▲0.1

US government export restrictions on shipments to Chinese
telecom equipment manufacturers had a negative impact of¥400 million on sales to the Company, but overall sales were
down only slightly thanks to increased 5G base station-related
demand from the US and other countries.

3.7

3.6

Factors of Increase/Decrease

Mobilecommunications

8.7

8.8

+0.1

Sales rose substantially for 76.8MHz crystal units with built-in
thermistors for 5G smartphones. Overall sales grew slightly,
as sales of TCXO and other low-margin products were reduced.

IoT

1.2

1.7

+0.5

Sales increased for communication modules for wearables
and other applications.

Consumer

4.0

4.3

+0.3

Sales increased for tuning fork crystal units for computersand other applications.

Medical equipment

0.9

1.3

Synthesizers/Sensors

0.5

0.6

+1.1

1.9
39.2

2.6
45.4

Sales increased for medical equipment, factory automation,and other applications.

+6.2

Other

Total

Copyright © 2022 Nihon Dempa Kogyo All Rights Reserved

41. Results for FY2021 (Ended March 31, 2022)

Operating Income – Analysis of Changes in Profit from FY2021 –◼ Profitability improved substantially due to the profit contributions generated by the
improving terms of trade in the automotive electronics market and the increased
sales of 76.8MHz crystal units with built-in thermistors for 5G smartphones＋¥4.98 billion(Billion yen)

FY2020OperatingincomeExcluding+¥3.28 bnof temporary
factors

Effect ofchangein salesExchangerate
fluctuation*1

Change ininventories
Increasein fixed
cost

Change inproductmix /improved
profitability,
etc.*2*1: Impact of approx. ±¥60 million/year for ¥1 fluctuation; FY2020: ¥106.17, FY2021: ¥112.86*2: The effects of the improved unit price of mass-produced products are included in the“Change in product mix/improved profitability, etc.”

Net sales ¥39.2 billion
Copyright © 2022 Nihon Dempa Kogyo All Rights Reserved＋¥6.2billion

FY2021
OperatingincomeExcluding+¥0.64 bnof temporary
factors¥45.4 billion
51. Results for FY2021 (Ended March 31, 2022)

Consolidated Financial Results (Quarterly)◼ Automotive electronics sales have been fueling a sales recovery since 2Q of FY2020◼ Earnings performance has vastly improved due to the combination of the streamliningof the corporate structure and the improved business environment
Net Sales
売上高

Operating Income (Excluding Temporary Factors）(Billion yen)

10.5
9.3

11.4
10.8 10.910.8
10.0

9.9 9.8

11.6 11.6(Billion yen)

1.23 1.25 1.26
0.79

7.5
0.47
0.17

▲0.32
▲0.45
▲0.5
▲0.52
▲0.67 ▲0.63

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
FY2019FY2020

Copyright © 2022 Nihon Dempa Kogyo All Rights Reserved

FY2021

1Q 2Q

3Q 4Q

FY2019

1Q 2Q

3Q 4Q

FY2020

1Q 2Q

3Q 4Q

FY20216

1. Results for FY2021 (Ended March 31, 2022)

Sales by Application – Sales by Main Application –◼ Orders of automotive electronics remain strong and sales are solid◼ Industrial equipment sales are flat for products for base stations◼ Mobile communications sales are strong for 5G smartphone(Billion yen)

Automotive Electronics

Industrial Equipment

Mobile Communications / IoT

6
5
4
3
IoT
2
MobileMobileCommunications
Communications

10

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
FY2019FY2020

Copyright © 2022 Nihon Dempa Kogyo All Rights Reserved

FY2021FY2019FY2020

FY2021FY2019FY2020

FY20217

1. Results for FY2021 (Ended March 31, 2022)

Consolidated Financial Position◼ Financial position is improving from the reduction of interest-bearing debt andgrowing profits
Received ¥5 billion investment
through issuance of Class A
shares in August 2020

(Billion yen)Interest-bearing
debt

27.9

*1

29.9
Other
liabilities

Shareholders’equity ratio

25.2

27.1

34.3

15.7
15.8

Net equity

35.7

32.1

14.1

14

13.8

14.9

20.0

15.1

14.7

End of March

End of March

End of March

End of March

End of March

End of March

2017

2018

2019

2020

2021

2022

36.7%

24.8%

24.2%

9.8%

21.5%

32.7%

1.11

1.98

2.18

6.42

2.64

1.35

5.3

13.6

(Net equity / total assets)

D/E ratio(Interest-bearing debt
/ net equity)

Copyright © 2022 Nihon Dempa Kogyo All Rights Reserved*1 ¥516 million of arrangement fee of syndicated loan is excluded from interest-bearing debt as of end of March, 20228

＜Contents＞

１．Results for FY2021 (Ended March 31, 2022)
２．Outlook for FY2022 (Ending March 31, 2023)
３．Medium-Term Management Plan
(FY2022ーFY2024)– As of March 10, 2022 –Copyright © 2022 Nihon Dempa Kogyo All Rights Reserved9２. Outlook for FY2022 (Ending March 31, 2023)

Consolidated Financial Forecast◼ Forecast for ¥5.0 billion in operating income for FY2022⇒ Profit expected to increase year on year in real terms (profit in FY2021 includes
a one-off profit of ¥640 million)
FY2022 Forecast

FY2021
Full Year

YoY

1H

2H

45,40824,20025,80050,000+4,5925,180+11.4%

2,300
+9.5%

2,700
+10.5%

5,000+10.0%

▲180
▲1.4%

4,536

2,300

2,700

5,000

+464

+10.0%+9.5%+10.5%+10.0%+0.0%

Income before Income Tax

4,920

2,100

2,500

4,600

▲320

Net Income

5,455

1,800

2,200

4,000

▲1,455

Exchange Rate (against the U.S. dollar)

112.86115.00115.00115.00+2.14

Depreciation

2,974

1,540

1,610

3,150

+176

R&D Expenses

1,500

800

850

1,650

+150

5

10

10

20

+15

(Million yen)
Net sales
Operating Income
Operating Income Ratio

Operating Income(Excluding temporary factors*)

Operating Income Ratio

Dividends per chare (Yen)

Copyright © 2022 Nihon Dempa Kogyo All Rights Reserved

Full Year* Temporary factors for FY2021 include ¥1,136 million in grant from Suzhou government and ¥492 million in expenses associated with thetermination of the Niigata NDK business. (+¥644 million in net)

10

２. Outlook for FY2022 (Ending March 31, 2023)

Sales Forecast by Application◼ Net sales are expected to increase by ¥4.6 billion from FY2021, mainly for
automotive electronics
FY2021(Billion yen)

Automotive
electronics

22.5

Industrial
equipment

3.6

Mobilecommunications

8.8

Net Sales
FY2022
Forecast
25.8

3.8

1.7

2.0

Consumer

4.3

4.6

Medical equipment

1.3

1.3

Synthesizers/Sensors

0.6

0.6

Other

2.6
45.4

2.5
50.0

Total

Factors of Increase/Decrease+.33

Sales are affected by the lockdown in Shanghai. However,
due to continuous strong demand, full-year sales are forecast
to grow about 14% year-on-year.

+0.2

Sales growth is expected for OCXO for 5G base stations andclock oscillators used in optical telecom devices for data
centers+0.9

Although sales for smartphones in China are expected toremain sluggish, sales of 76.8MHz crystal units with built-in
thermistors are expected to grow further due to the shift tohigher frequencies for 5G smartphones in the market as awhole. Sales of ultra-compact crystal units for 5G
smartphones and wearable devices are also expected toincrease.

+0.2

Forecasting growing sales for mirrorless cameras
and other consumer products

9.4

IoT

Copyright © 2022 Nihon Dempa Kogyo All Rights Reserved

YoY

+4.6

11

２. Outlook for FY2022 (Ending March 31, 2023)

Operating Income ー Analysis of Changes in Profit from FY2021 –◼ Profit expected to increase with the growth in sales, even amid higher parts prices andfixed costs＋¥0.46 billion(billion yen)

Increasein salesExchangerate
fluctuation*1

Increase in
fixed cost

Change ininventories
Impact of rising
component
prices,electricity costs,
etc.
FY2022
Operating income

FY2021
Operating income

Excluding+¥0.64 bnof temporary
factors*1：Impact of approx. ±¥60 million/year for ¥1 fluctuation; FY2021: ¥112.86, FY2022: ¥115.00

Net sales ¥45.4 billion
Copyright © 2022 Nihon Dempa Kogyo All Rights Reserved＋¥4.6 billion¥50.0 billion

12２. Outlook for FY2022 (Ending March 31, 2023)

Capital Investment Plan
◼ Expand production capacity to meet growing demand for automotive electronics
and mobile communications applications◼ Increase investment in R&D for photolithography processing(Billion yen)

4.0

3.7
0.4

3.5

System investment, etc.

3.0
2.5

1.1

2.４

Infrastructure investment

0.2

2.0

0.7

0.9

R&D investment

1.5
1.0
0.5

0.3
1.0

0.0
FY2021

Copyright © 2022 Nihon Dempa Kogyo All Rights Reserved

Breakdown by application
Automotive electronics:¥0.4 bn
Mobile communications:¥0.6 bn

1.5

FY2022

Investment to increase production
Breakdown by application
Automotive electronics : ¥1.4 bn
Mobile communications: ¥0.1 bn

13

＜Contents＞

１．Results for FY2021 (Ended March 31, 2022)
２．Outlook for FY2022 (Ending March 31, 2023)
３．Medium-Term Management Plan
(FY2022ーFY2024)(1) Summary(2) Business Strategies– As of March 10, 2022 –Copyright © 2022 Nihon Dempa Kogyo All Rights Reserved

14

３. Medium-Term Management Plan (FY2022ーFY2024) (1) Summary

Positioning and Aims of the Medium-Term Management◼ The Medium-Term Management Plan clarifies our shift from structural reforms to a growth phase◼ Long-Term Management Strategy—Vision 2030 looks ahead to the year 2030 and clarifies the direction weshould proceed in the medium to long term. The long-term management strategies will start during the MediumTerm Management Plan period
Period of the new Medium-Term Management Plan (FY2022–FY2024)
Achieve a balance between solidifying existing businesses andbuilding a foundation for future growth

Investment

Strengthen and solidify
existing businesses
Further expand cash
generation

Automotive
electronics,
5G (Mobile
communications /Industrial
equipment)

Investment in
expansion of production
Investment

Organizational fortification& human resource
development investment

Cash generation
New product development& new business investment

Long-Term Management Strategies—Vision 2030
(Elaborate concrete strategies)

Clarify the direction against the change of businessenvironment from 5G to 6G and further developmentof IoT society◼

DeepenAutomotive
electronics

Mobile andterminal devices◼

Pursue

6G and next-generation
infrastructure equipment

Space

Implement carbon-neutral measures able to comply
with global standards

Repayment

Financial soundness
Copyright © 2022 Nihon Dempa Kogyo All Rights Reserved15

３. Medium-Term Management Plan (FY2022ーFY2024) (1) Summary

Management Objectives of the Medium-Term Management Plan
◼ Increase sales centering on automotive electronics and mobile communications
applications◼ Boost profitability by increasing sales of compact high -frequency crystal
devices in line with the full-fledged adoption of 5G◼ The plan anticipates higher prices for parts (such as IC)
Operatingincome ratio(Excluding temporary
factors）

Net Sales

10.0%

-5.1%

10.0%

11.0%

45.4

50.0

加藤社長と
三菱モルガンの内野氏はこの開示方法に同意58.0

-1.1%

39.5

39.2

FY2019FY2020

FY2021

FY2022

FY2024

ResultResultResultOutlookMedium-term(Billion yen)plan target
ROIC
Copyright © 2022 Nihon Dempa Kogyo All Rights Reserved

FY2021

FY20228.5%

8.6%

FY202410.0%

16

３. Medium-Term Management Plan (FY2022ーFY2024) (1) Summary

Investment Strategy◼ Plan a capital investment of ¥11.5 billion over 3 years accompanying the transition toa growth phase
Medium-term management
Last 3 years
plan(FY19-21)(FY22-24)
Priority on improving
financial position
Restrained investment

3-year total¥6.0 bn

Growth investment
phase

11.5 bn(FY22:3.7 bn)

Investment
to increase
production¥2.1 bn

5.4 bnR&D
investment¥0.5 bn

2.1 bnInfrastructure investment¥3.0 bn

3.0 bnSysteminvestment,
etc.

¥0.4 bn

1.0 bnCopyright © 2022 Nihon Dempa Kogyo All Rights Reserved(FY22:1.5 bn)(FY22:0.7 bn)(FY22:1.1 bn)(FY22:0.4 bn)◼Expand capacity to meet growing
automotive electronics and mobile
communications demand◼Invest in photolithography technology◼Develop advanced compact and highfrequency range products◼Invest to renew equipment tosupport long-term sustaining growth◼Construct system and data
infrastructure to advance DX

17

３. Medium-Term Management Plan (FY2022ーFY2024) (1) Summary

Financial Strategy
Increaseshareholders’equity◼Raised roughly ¥4 billion
through public offering◼Redeemed of all Class A
shares◼Steady accumulation of profit
through increased income

Lower the loan
◼Lower the loan balance tobalancean appropriate level(Improve
the D/E ratio)

Increase
dividend◼Plans to increase dividend
after full redemption of ClassA shares◼Transfer to retained earnings
to maintain stable dividends
after public offering

Copyright © 2022 Nihon Dempa Kogyo All Rights Reserved

Shareholders’ equity ratio
End of FY21

End of FY24

32.7%

40.0%

D/E ratio( Interest-bearing debt /shareholders’ equity)

End of FY21

End of FY24

1.35

0.80

times

times

Dividends per share
End of FY21

¥5 /half year¥10 /half year18

＜Contents＞

１．Results for FY2021 (Ended March 31, 2022)
２．Outlook for FY2022 (Ending March 31, 2023)
３．Medium-Term Management Plan
(FY2022ーFY2024)(1) Summary(2) Business Strategies– As of March 10, 2022 –Copyright © 2022 Nihon Dempa Kogyo All Rights Reserved19３. Medium-Term Management Plan (FY2022ーFY2024) (2) Business Strategy

Business Summary and Strategy◼ Plan to increase sales mainly for automotive electronics and mobile communications
to ¥58.0 billion in FY2024
Environmental awarenessMedium-term sales target(Billion yen)

58.0

9.0
3.8
11.4

9.7
4.6

13.9

Other
Industrial
equipment
Mobilecommunications / IoT
*1

25.8
FY22

29.8

5G related

50.0

Automotive
electronics

Mobilecommunications / IoT

Industrial
equipment

Automotive
electronics

FY24*1: ¥1.2 billion for some of the uses included in the“Other” were transferred to mobile communications and
IoT uses. (Revised materials published on
March 10, 2022)
Copyright © 2022 Nihon Dempa Kogyo All Rights Reserved

Other *2

• Recovery in number ofcompleted vehicle andincreasing in number ofcrystal devices installed
as number of vehicle
equipped with ADAS
increases• Smartphone unit
shipments have peaked,
but the 5G installation
ratio is rising• Number of small basestations (RU) is
increasing rapidly due toexpanding 5G
communications networks• Consumer: Growing
market for professional
cameras• Medical devices andsynthesizers/sensors:
Gradually increasing

Growth Directions• Supply high quality, reliable
products to maintain high market
share• Capture 5G demand by using ouradvantages in compact and highfrequency technologies(photolithography blank)• Aim to expand sales byintroducing a compact OCXO for
5G base stations (RU)
• Consumer (cameras): Offset the
decline in consumer products withprofessional products• Medical devices: Increase sales to
new customers• Synthesizers/sensors: Continue
developing contract proposals andincrease new orders*2： Other includes consumer, medical devices (hearing aids, ultrasonic devices, etc.), Synthesizers/sensors 20

３. Medium-Term Management Plan (FY2022ーFY2024) (2) Business Strategy

Business Overview and Strategy: Priority Focus Fields◼ Focus on automotive electronics and 5G-related areas

Automotive
electronics◼
◼

Supplying products for automotive applications since
the early 1970s
Holding 50% or higher market share*1 for many years*1: NDK estimates based on data from research companies

Copyright © 2022 Nihon Dempa Kogyo All Rights Reserved

5G◼
◼

Began development of photolithography blanks around2008
Began mass production of high-precision products
required for 5G products ahead of competitors21

３. Medium-Term Management Plan (FY2022ーFY2024) (2) Business Strategy

Automotive Electronics
NDK’s uncompromising approach to high quality required toautomotive product
NDK receives steady trust from tier 1 customers◼

10 years or more
maintaining 50%+
market share

NDK's comprehensive support capabilities

Planning

Development

Others: 10%
Ability to propose high quality products that anticipate needs
Design technology to meet required specifications

Company D: 3%

Global market
share

Company C: 7%
Prototypes

Verification capability to prevent defects before they occur
Company B: 10%

Mass
production

Ability to supply high quality and highly reliable productsCompany A: 15%

Shipping

Full-fledged support in the unlikely event of a defective product

Copyright © 2022 Nihon Dempa Kogyo All Rights Reserved

Source: NDK estimates based on data from research companies(Market share as of CY20 forecast)22

３. Medium-Term Management Plan (FY2022ーFY2024) (2) Business Strategy

Automotive Electronics (Market Environment (1))◼ Market potential for crystal products is expected to increase due to an increase in thenumber of completed vehicles and the number of crystal units installed
Crystal Product Potential for Automotive Electronics Applications(million units)
6,000

5,000

10% CAGR
Increase in
number ofcompletedvehicles

4,000

Increase in
number of
crystal devices
installed

3,000

...

2,000

Market size is expected to increase significantly
during the Medium-Term Management Plan

1,000

0

FY21 FY22 FY23 FY24 FY25

FY30

Source: NDK estimates from FY21 are based on forecast data from research companies
Copyright © 2022 Nihon Dempa Kogyo All Rights Reserved

No impact on the number of crystal devices
installed is expected accompanying theshift to EVs

23３. Medium-Term Management Plan (FY2022ーFY2024) (2) Business Strategy

Automotive Electronics (Market Environment (2))◼ The growth of ADAS installed into automotives will raise the crystal device demands◼ The trend of standardization and mandatory of ADAS installation is expected to accelerateaccording to the development of automated driving technologies
Forecast of global sales volume of completed vehicles◼

The number of completed vehicles is expected torecover to the 94-million-unit level in CY24
100 (million units)

Estimated number of crystal devices installed◼

The number of crystal devices installed is increasing
significantly as ADAS are becoming more common◼

No impact on the number of crystal devices installedis expected accompanying the shift to EVs

95
90
ADAS increase

85(Units: pc/vehicle)

80

0

CY19 CY20 CY21 CY22 CY23 CY24 CY25

Source: NDK estimates from CY21 are based on forecast data from research companies
Copyright © 2022 Nihon Dempa Kogyo All Rights Reserved

Conversion to EVs

35.7

37.0

39.0

40.8

42.3

44.0

34.2

CY19

CY20

CY21

CY22

CY23

CY24

CY25
24

３. Medium-Term Management Plan (FY2022ーFY2024) (2) Business Strategy

Our Business Domain in 5G◼ 5G has two main markets: the devices market and the network market, and NDK canapproach both markets◼ The 5G market is expected to have high growth potential and a wide range of business
opportunities exist

Although the required crystal products
are different,

Devices

we can approach both markets
with NDK's technicalcapabilities(Mobilecommunication)

There is a wide range of business opportunities
in the 5G market
Copyright © 2022 Nihon Dempa Kogyo All Rights Reserved

Network(Base stations)25

３. Medium-Term Management Plan (FY2022ーFY2024) (2) Business Strategy
Strength: Photolithography Processing
Mobile Communications (NDK‘s
Technology (1))◼ With the advent of the 5G era, the need for compact, high-frequency crystal devices will
increase, and the advantages of photolithographic processing technology will become
even more pronounced

5G domain

smallerSuperiority in
Photolithographic
processing

The Arrival of the 5G Era
Size

Changing needs for crystal products
Pre
5G domain
Superiority inmechanicalprocessing

largerlower
Copyright © 2022 Nihon Dempa Kogyo All Rights Reserved

Frequency

higher26

３. Medium-Term Management Plan (FY2022ーFY2024) (2) Business Strategy
Strength: Photolithography Processing
Mobile Communications (NDK‘s
Technology (2))◼ The technological know-how we have accumulated over many years has become the cornerstone of ourintegrated production of high-quality, high-performance photolithography blanks, giving us a competitive edgein 5G applications
Initiatives and Results to Date◼

We have been accumulating production know-how
through repeated trial and error since around 2008◼

Realization of high quality and high performance (compact
size and high frequency) photolithography blanks withhigh productivity◼

Successfully developed products for 5G ahead of othercompanies✓

Acquired first certification of crystal unit (76.8 MHz)
with a built-in thermistor from Qualcomm(mass production began in June 2020)

Copyright © 2022 Nihon Dempa Kogyo All Rights Reserved

Synthetic quartz
crystal growth◼ Success in growing large,
high-purity raw crystals
High quality andlarge synthetic quartz
crystalPhotolithographic
processing

76.8 MHz
crystal units with built-in
thermistor◼ Mass production using 4-inch wafers
started ahead of competitors

３. Medium-Term Management Plan (FY2022ーFY2024) (2) Business Strategy

Mobile Communications (Market Environment)◼ Shift to the 76.8MHz band is proceeding along with the growth in demand for 5G
smartphones.
◼ Company expands sales of ultra-compact crystal units (including 76.8MHz
products) with photolithography blanks for 5G smartphones and wearable devices
Smartphone unit volume potential

Potential ratio by smartphone and peripheral device frequency

5G smartphone market CAGR 18%◼Crystal unit frequency is rising with the spreadof 5G smartphones

5G smartphone ratio
40%
Total number
21%

49%

55%

62%

of smartphones(million units)◼Ongoing shift to the 76.8MHz bandwidth
Expected transition of ratio by frequency band

1,500

1,000

Up to
32 MHzor less

500

Less than
76.8 MHz

76.8MHz
0

CY20

CY21

CY22

Copyright © 2022 Nihon Dempa Kogyo All Rights Reserved

CY23

CY24

43%

53%

5%
CY21

39%

40%

80%

21%

CY24

Source: NDK estimate after CY2021 based on research company forecast data28

３. Medium-Term Management Plan (FY2022ーFY2024) (2) Business Strategy

Industrial Equipment: Base Stations (NDK’s Strengths)◼ NDK is the sole Japanese mass producer of OCXO for 5G base station【5G Network system 】 *1
Base station at 5G network system,
which connects devices to networks, iscomposed of CU, DU, that process data,
and RU, that sends/receives radio
waves between devices

NDK provides high-stable
OCXOs using our own high-purity
and high-quality synthetic quartz
crystal◼ OCXO (25×22mm)*1

Copyright © 2022 Nihon Dempa Kogyo All Rights Reserved

CU : Abbreviation for Central Unit
DU : Abbreviation for Distributed Unit
RU : Abbreviation for Radio Unit29

３. Medium-Term Management Plan (FY2022ーFY2024) (2) Business Strategy

Industrial Equipment: Base Stations (Market Environment)◼ 5G base stations are expected to need a large number of small wireless base stations called
radio units (RU)
◼ NDK will aim to expand sales of compact OCXO
Base Station Market Potential

Forecast of RU Demand by Region

RU market: 38% CAGR

8,000

8,000 (Units: thousand stations)(Units: thousand stations)
Outside
China

CU
4,000

DU

6,000

China
0

CY21

CY22

CY23

CY24

CY25

4,000

RU
2,000

0

CY21

CY22

Copyright © 2022 Nihon Dempa Kogyo All Rights Reserved

CY23

CY24

◼ World's smallest (7×5 mm)compact OCXO

Aim to provide compact OCXO thatmaintain stable performance even in harshenvironments

Source: NDK estimates from CY21 are based on forecast data from research companies

30

Final Comments◼ The New Medium-Term Management Plan has started one year ahead of schedule.
Aiming for continuous growth by solidifying current business and taking medium- tolong-term initiatives.

Current
location

Globalfinancialcrisis2010

Slump in businessperformance

COVID-19

2015

2020

Automotive electronics growth& 5G in full swing

A giant leap
toward sustainablegrowth

2024

2022

2030

Initiatives for Vision 2030
New Medium-Term Management Plan
• Strengthen current businesses
and improve profitability

Vision 2030
• Expand into new markets• Create new business models• Achieve financial soundness
Foundation for FY18 and beyond• Production transfer• SAW joint venture• Structural reform• Issued Class A shares

Copyright © 2022 Nihon Dempa Kogyo All Rights Reserved

Previous MediumTerm Management
Plan• Steady progress toward alean "muscular" company

31

Thank you everyone for your time

For IR inquiries:
Corporate Planning Group,
Nihon Dempa Kogyo Co., Ltd.
Mail: irmaster@ndk.com

Copyright © 2022 Nihon Dempa Kogyo All Rights Reserved

32

Appendix

Sales by Application (Half Year)
1H

FY2021 Result
2H

1H

FY2022 Forecast
2H

Total

Total

Automotive electronics

11.2

11.3

22.5

12.5

13.3

25.8

Industrial equipment

1.8

1.7

3.6

1.9

1.9

3.8

Mobile communications

4.2

4.6

8.8

4.4

5.0

9.4

IoT

0.8

0.9

1.7

0.9

1.1

2.0

Consumer

2.2

2.1

4.3

2.3

2.3

4.6

Medical equipment

0.6

0.7

1.3

0.7

0.6

1.3

Synthesizers/Sensors

0.2

0.4

0.6

0.2

0.4

0.5

Other

1.2

1.4

2.6

1.3

1.2

2.5

Total

22.3

23.1

45.4

24.2

25.8

50.0

(Billion yen)

Copyright © 2022 Nihon Dempa Kogyo All Rights Reserved

33

Appendix

Special IR Page on NDK Crystal Devices

https://www.ndk.com/en/ad/2021/index.html
Copyright © 2022 Nihon Dempa Kogyo All Rights Reserved

34

Copyright © 2022 Nihon Dempa Kogyo All Rights Reserved