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September 27, 2002
ＦＤＫ ＣＯＲＰＯＲＡＴＩＯＮFDK Group Restructures, Announces Internal Cost -Saving Reforms
Due to the larger than expected scale and duration of the "IT depression", which started in thelatter half of 2000, additional company actions are needed in order to survive the economicturndown.

Since FDK regards its optical group as one of its core business unit, FDK’s sales of

optical components have sharply decreased. Furthermore, an recovery from the downturn in thenear future is not anticipated. In other FDK’s electronic products, price competition is intensifying
by the increasing shift in production to China and the rapid rise of Chinese manufacturers. Owing
to this inactive market conditions, declin e in corporate sales continued this year.
In the fiscal year 2001, FDK performed company organizational changes: shifting productionof ferrite to China, production and department consolidation and staff reduction. However, theinactivity in the market was longer than originally anticipated. In order to establish a stronger
enterprise during this economic downturn, the company’s core strategies will be re-evaluated and at
the same time necessary company restructuring will be implemented.

１．FDK Restructuring Outline
uConcentrate on the company’s core-competencies

With a focus on electronic products and modules, the comprehensive power, which is basedon our company’s forte, material technology and high-density mounting technology isutilized in order to supply products that meet customer ’ s needs.

Material and Processing technology ＋Circuit and High-density Mounting Technology⇒Offer solution to the customer by new productBusiness field＜Main field＞
Broadband network and network peripheral equipment
Communication network, mobile communications terminal, andother equipments＜Other positively deployment field ＞
Cars
Amusement
Environment

page 2uImproveme customer satisfaction and reduce development time
Simulating customer needs and proposing solution by cooperation with sales and marketing,and technical.
Speeding up decision -making by installing product strategy meeting focused on CEO.

u

Further promotion of low-cost manufacturing
Efficient utilization of overseas bases.
Strengthening of manufacturing technique power concentrated on the low -cost manufacture
ring.

u

Abolish multi-tiered company system.

uReexamine the function of domestic plants and streamline the production at home andabroad.

２．Measures being Taken during restructuring(1) Streamline domestic operations and strengthen internal controls
Optical components business：In order to cope with the severe market downturn,low-cost manufacturing is realized by closing or
streamlining domestic plants and utilizing overseas
assets more efficiently . [Research andDevelopment aswell as trial production remains in Japan /mass-production function s move overseas.]Hybrid module business ：In order to heighten cost competitiveness and operating
base, efficient utilization of overseas bases is advanced,
such as XIAMEN FDK and SUZHOU FDK, andstreamline domestic bases.
(2) Abolish multi-tiered company system, reorganization of the organizational chart
In-house company system is abolished, and the organization chart is changed toreflect a more efficient central control by FDK. Especially, improvement incustomer satisfaction is targeted based on product development in cooperation
with the customer , better price competitiveness, and quick decision-making
・Reorganization to 2 sales con trol departments from 5 sales departments andproduction department.
・Installation of product strategy meeting focused on CEOQuick decision -making on thoroughness and development of customer -orientedproduct.

・ Consolidate Purchasing functions into one company-wide department.
By integrating purchasing functions, efficiency is increased, also examination ofcomponent supplier or methods, expansion of local procurement in overseas bases,
thorough low-cost manufacture ring etc. are promoted.

Furthermore, inconsidering environment, expansion of green procurement is aimed.

page 3・ Consolidate four distinct headquarters into two departments working inharmony.
Simplify and increase -efficiency in the organization(3) Staff Reduction
In order to perform (1) and (2) measures and to build an efficient organization in thedomestic plants, early retirement packages were offered in the following areas:
・Reducing optical parts business, streamlining domestic back -officesection (Kosai area)
150 persons
・Moving hybrid module business out of Japan (Iwaki area)
150 persons
・ Reorganizing and streamlining the management functions
Total

100 persons
400 persons

In addition, about 3 billion yen per year i in savings is expected By carrying out the abovemeasures.

３．Fiscal Year 2005 Sales Goals
Efforts are being made to attain the following business objectives based on structuralreforms, new product development and strengthening it’s the company’s competitive power.
Net Sales:
140 billion yen
Operating income: 8 billion yen (6% of operating incomes)