ANNUAL REPORT 2003
For the year ended March 31, 2003

Profile
Shibaura Mechatronics Corporation commenced operations in 1939 under the name of Shibaura Engineering Works Co., Ltd. as anelectric power equipment manufacturer, mainly of electric motors. The Company significantly contributed to building theinfrastructure of the industrialized society in the 20th century.
In the last decade, however, the Company carried out a bold business restructuring and changed its name to Shibaura
Mechatronics Corporation to reflect its new objective of supplying electronic device manufacturing equipment. At the same time, theCompany defined its corporate identity as “The Provider of Infrastructure for the Digital Age”.
The 21st century is the age of IT and of the environment. To fulfill the demands of this century, the Company has declared that it
will become “e-Shibaura”, a truly IT-based enterprise, as well as “E-Shibaura”, an enterprise that places priority on the Earth’s
environment. In other words, as “e & E-Shibaura” we will supply products and services that are suitable for the age of IT and of theenvironment while encouraging innovative behavior and thinking among our employees in the pursuit of global business expansion.

History
1875
Shibaura Engineering Works Co., Ltd.

Tokyo Electric Company

1939

Tokyo Shibaura Electric Co., Ltd.
(Today,Toshiba Corporation)

1949

1939

Shibaura Engineering Works Co., Ltd.

Toshiba Automation Co., Ltd.

Electric motors

Manufacturing automation equipment

1932

Tokuda Seisakusho Co., Ltd.
Vacuum applied equipment

1991

Toshiba Corporation

1996(Industrial Mechatronics Business Unit)

Toshiba Mechatronics Co., Ltd.

Shibaura Engineering Works Co., Ltd.
Motors, FPD manufacturing equipment, etc.

Semiconductor manufacturing equipment, etc.

Oct.,1998
SHIBAURA MECHATRONICS CORPORATION

Contents
Financial Highlights

1

To Our Shareholders

2

Financial Review

4Five-Year Summary

7

Topics 2002 in Shibaura

8

Environmental Activities 2002 in Shibaura

11

Board of Directors

12

Corporate Data

13

Cover Photo:DVDs in sputtering chamber

ANNUAL REPORT 2003
For the year ended March 31, 2003

The DVD (Digital Versatile Disc) is about
to make quantum leaps. Our “Octava - II ”
is the world’s fastest sputtering equipment
for DVDs, and incorporates our highspeed sputtering technology and highprecision disc transferring technology.
(See page 9.)

Forward-Looking Statements
This annual report contains forward-looking statements concerning Shibaura’s future plans, strategies and performance. These forward-looking statements are not historicalfacts, rather they represent assumptions and beliefs based on data currently available. Furthermore, they are subject to a number of risks and uncertainties that, without
limitation, relate to economic conditions, worldwide mega-competition in the electronics business, customer demand, foreign currency exchange rates, tax rules, regulations
and other factors. Shibaura therefore wishes to caution readers that actual results may differ materially from our expectations.

Financial Highlights
Thousands of
U.S. dollars

Millions of yen
2003

2003

2002

Years ended March 31

Consolidated¥ 54,761¥ 54,917$ 455,589

Operating income (loss)(1,502)(1,536)(12,500)

Net income (loss)(1,416)(1,118)(11,781)

Total assets

63,61567,647529,244

Total shareholders’ equity

17,066

18,514

141,978

Net income (loss) per share¥ (28.40)¥ (22.46)$¥ 43,754¥ 45,406$ 364,010

Operating income (loss)(1,742)(1,679)(14,497)

Net income (loss)(1,455)(1,168)(12,110)

Total assets

57,646

61,882479,585

Total shareholders’ equity

15,785

17,264

131,325

Net income (loss) per share¥ (29.19)¥ (23.42)

Net sales(0.24)

Non-consolidated
Net sales$(0.24)

Note : The U.S. dollar amounts in this report represent translations of Japanese yen, for convenience only, at the rate of ¥120.20=U.S.$1.00, as of March 31, 2003.

Net sales

Operating income

Net income

Total assets

Total shareholders’ equity(¥ Billions)(¥ Billions)(¥ Billions)(¥ Billions)(¥ Billions)

71

53
44

42

20

2.7

63

75

2.6

71
67

2.0
55
45

21

83

3.3

76

61 60

55

68

17

62 64

16

20
19 19
17 17
16

58

0.6
44

0.5

0.3

0.2
-0.1

-0.2

-0.1

-1.5 -1.5-1.7 -1.7

-1.1
-1.2
-1.4
-1.5

1999 2000 2001 2002 2003

1999 2000 2001 2002 2003

-2.2

1999 2000 2001 2002 2003

Consolidated

1999 2000 2001 2002 2003

1999 2000 2001 2002 2003

Non-consolidated

Financial Highlights

1

To Our Shareholders
Shibaura” and will, under the motto of “e & E-Shibaura”, endeavor toinnovate its management.

Performance in Fiscal 2002
The market environment in fiscal 2002 was characterized by aslowdown of growth, due largely to stagnant IT market conditions
around the world and declining stock prices, and by businesses’continued restraint on equipment investment. The Japanese market,
in particular, saw continued economic downturns, including inactive
personal consumption and worsening deflation.
In the second half of fiscal 2002, however, the market
environment surrounding Shibaura Mechatronics began to show
some signs of recovery. At present, major LCD manufacturers aremaking equipment investment at a steady pace, and in thesemiconductor industry there are signs that equipment investment
for 300 mm wafers will gather momentum. With respect to DVDs, theuse of recorders has really started to spread, and equipment
investment for recordable DVDs is becoming increasingly active.

Hiroo Okuhara
President and Chief Executive Officer

The corporate philosophies of Shibaura Mechatronics are“Innovative in All Things”, “Pursuit of Rationality”, and “Respect
Humanity”. By endeavoring to ensure that these concepts will
permeate the Company and its subsidiaries and affiliates, we areworking hard at actualizing a global business group full of speed
and vitality. Under these corporate philosophies, we arecontinuously addressing a number of corporate tasks. These tasks
include actualizing a group that represents high growth and highprofitability; fully implementing the management innovation
movement “SM2003 Campaign”, which incorporates statisticalmanagement reform techniques (six sigma methodology); adopting
result-based personnel treatment programs designed to help
employees find greater satisfaction in their jobs and thus enhancetheir morale, and further stepping up our environmental preservation
activities.
We believe that the production of manufacturing equipment forvarious electronics components indispensable for the IT society of
the 21st century, such as LCDs, other flat panel displays,
semiconductors, DVDs, and rechargeable batteries, is a field inwhich we can definitely expect continued high growth. Focusing on
this business field, we will pursue business expansion centered on
our corporate identity of being “The Provider of Infrastructure for the
Digital Age”. In that direction, we are striving to be a real IT
company, “e-Shibaura”, by carrying out e-innovations through theutilization of networks in all of our business operations.
Moreover, the 21st century is also the age of the environment,
and it is becoming increasingly important for every business toconsider the Earth’s environment. Shibaura Mechatronics gives due
consideration to the Earth’s environment in its manufacturing
activities, such as by designing all the products to be developed asenvironmentally conscious products “E-Products”. At the same time,
the Company will promote the “E-innovation” (emphasis on theenvironment) in all its business activities in order to actualize “E-2

To Our Shareholders

Under these business circumstances, our LCD manufacturing
equipment sales in fiscal 2002 exceeded the planned level thanks
to a sharp increase in investment in equipment for the fifthgeneration large glass substrates. However, in the automation
systems & vacuum equipment segment, which was considerably
affected by a low level of business activity in Japan, sales did notreach the planned level. As a result, the Shibaura Group’s
consolidated sales in fiscal 2002 slightly decreased from theprevious fiscal year to ¥54,761 million.
As for income, the Shibaura Group suffered a consolidated
ordinary loss of ¥2,135 million for fiscal 2002, partly because of anincreased development costs and so on for unexpectedly rapid risein investment in equipment for the fifth-generation large glass
substrates in the first half of the year, and partly because of thedecrease in profits resulting inevitably from the weak sales of theautomation systems & vacuum equipment segment. Although we
stepped up our efforts to further reduce fixed costs and otherexpenses under an emergency action plan in addition tocontinuously making streamlining and cost-cutting efforts, we could
not fully make up for a loss suffered in the first half of the fiscal year
and thus regrettably recorded a large loss at the consolidated
income level. In the second half of fiscal 2002, however, our basic
earnings performance began to improve remarkably.
The level of orders received reached bottom in fiscal 2001 andbegan to pick up in fiscal 2002. In particular, the volume of orders
received in the second half of fiscal 2002 far exceeded the plannedlevel. LCD-related orders stayed at a fairly high level, and orders forback-end process equipment increased in the semiconductor field.
DVD-related orders reached an all-time high.
Shibaura Mechatronics is working hard at improving its financial
structure. As a result of strenuous efforts to cut inventories andreduce trade receivable, the Company succeeded in improving
cash flows and in finally achieving a D/E ratio of less than 100
percent on March 31, 2003.

Future Activities
In consideration of domestic and international business trends,
changes in our business environment, and other factors, we haveformulated a medium-term business plan covering the three years
beginning with fiscal 2003. The basic policy of this medium-termbusiness plan is to refocus on a high profitable structure and a
growth path. Under the plan, we will take measures to expand
business in growth fields and strengthen our competitiveness in a
deflationary environment.
At the same time, we will place priority on management thatemphasizes cash flows. For this purpose, we will endeavor to makemore efficient use of our management resources through earlyrecovery of trade receivable, reduction of inventories, and so on.
We will thus further improve our financial structure. In addition, we
will strive to establish a more stable earnings structure by promoting“streamlined management” through such measures as reduction of
fixed costs.
On April 1, 2003, Shibaura Mechatronics set up the Bonding
Equipment Division, integrating the business for bonding equipment
for semiconductor back-end processes and the business forbonding equipment for LCD back-end processes. Through the newdivision, we will concentrate our high-speed, high-precision
mechanical and bonding technologies and will thereby strengthen
our development capabilities and our capability of providing
systemized equipment for the expansion of business.
With about half of its sales is now recorded abroad, Shibaura
Mechatronics is better preparing itself to do business in the global
market, primarily through overseas affiliated companies. Further
enhancing cooperation between the headquarters in Japan and four
overseas affiliated companies in the United States, Taiwan, China,
and Korea, the Company will try even harder to expand business in
the Asian market, especially in China, Taiwan, and Korea.
Our joint venture company in Korea has constructed a newfactory. To respond to the active LCD-related equipment investment
in Korea, the factory, completed in the end of April 2003, will
gradually boost production, beginning with LCD-related peripheral
equipment.

Corporate GovernanceCorporate governance, as we define it, is the function of governingbusiness administration in such a way as to increase medium- andlong-term enterprise value for shareholders, customers, employees,
and society.

(2) We have established “SMSAP” (Shibaura Mechatronics SelfAssessment Program) as a voluntary auditing system covering thewhole Shibaura Group, including affiliates.
(3) We have established “Shibaura Values”, which are values thatshould be shared by all directors and auditors and by all employees
to give a concrete form to the “Shibaura Group Corporate Identity
and Corporate Philosophies”. In addition, we have reviewed our“Code of Conduct”, which provides a basis for compliance withlaws, social norms, and ethics and for risk management by clearlystating what should be done and what should not be done. We havealso issued a “Management Book” as action guidelines for all
employees in managerial positions and have taken steps to ensure
its thorough implementation.
Shibaura Mechatronics is making efforts to enhance its IR
activities. The Company periodically holds IR reporting meetings athome and abroad for institutional investors and analysts. We will
also make continued efforts to have Shibaura Mechatronics better
understood by general investors by utilizing such means as more
open press releases and Web pages. At the same time, we will
endeavor to make shareholders’ meetings more open-minded.

For the Future
Although the severe market environment continues, and Japanesecompanies are shifting more of their manufacturing bases to foreigncountries, we are confident that it is Japanese manufacturing
equipment makers that lead the world manufacturing industry in the
21st century and that manufacturing equipment is the engine for the
IT industry. With this confidence and pride, we will carry on ourbusiness in the future.
For that purpose, it is absolutely necessary to shorten the “Timeto Market”. If Japanese equipment manufacturers lose in thiscompetition, they will not be able to lead the world manufacturingindustry.
Fortunately, Japan has the power to create IT engines of the next
generation, such as video games, DVDs, cellular phones, digital
cameras, intelligent consumer electronics, and digital TVs. Based inJapan, Shibaura Mechatronics will seek to be market-driven and will
be agile to compete successfully in the global market.
We hope that in expectation of the further growth and prosperityof Shibaura Mechatronics our shareholders will extend to us evengreater support and understanding.
July 2003

In fiscal 2002, we conducted the following activities to improve
our corporate governance:(1) At a regular shareholders’ meeting held in June 2002, ourshareholders reduced the term of office of director to one year inorder to clarify the directors’ management responsibility and toestablish a more dynamic system to immediately react to thechanges in the business environment.

Hiroo Okuhara
President and Chief Executive Officer

To Our Shareholders

3

Financial Review
Sales

manufacturing equipment, receiving orders at a steady pace thanks
to investment in manufacturing facility for fifth-generation large glass

The Japanese economy continues to struggle. However, in thesubstrates (over 1 m square). The automation systems & vacuum

electronics field, our major business field, investment in LCD (liquid

equipment segment was substantially affected by lackluster

crystal display) manufacturing equipment has been active, andbusiness activities in Japan, and its sales did not reach the planned

inventory adjustment of certain semiconductor devices has beenlevel. The Group’s consolidated sales in the year ended March 31,

steadily taking place. Some users have begun to see improvements

2003 totaled ¥54,761 million, almost reaching the planned level andin their factory operating ratios.

slightly below the previous year’s corresponding figure.

Under such circumstances, in the year ended March 31, 2003,
the LCD manufacturing equipment market was relatively strong, due
to active investment in Korea and other area for equipment capable

Profit and Loss Analysis

of processing large glass substrates of the next generation. The
semiconductor manufacturing equipment market continued to be

We worked hard at improving earnings performance by stepping upvery weak for the second consecutive year because of a perceived

streamlining and cost-cutting efforts in the management innovation

excess manufacturing capacity resulting from slow sales of cellular

movement “SM2003” and implementing emergency action plans,phones and personal computers, with a few exceptional area where

including efforts to reduce fixed costs and other expenses.

the operating ratio has increased. The market for laser equipment

Although the fine mechatronics segment posted sales close to theand automation equipment continued to be impacted by generalplanned level, its income fell far short of the planned level partly

investment restraint in Japan. The optical disc industry, which

because of increased expenses resulting from a sharper-than-previously suffered from slow equipment investment due to excess

anticipated surge in investment in manufacturing equipment for fifth-

supply and lowered price of CD-R, began to see a real pickup in

generation large glass substrates and partly because of increased

investment in DVD manufacturing equipment. The cigarette vending

development costs to make equipment ready for new products. The

machine market continued to shrink because of the global restraint

automation systems & vacuum equipment segment was unable toon cigarette demand.

escape being affected by a delay in the recovery of domestic
equipment investment and thus suffered decreases in both sales

Under these severe business circumstances, the Group (theCompany and its consolidated subsidiaries) made concerted efforts

and income. The Group’s consolidated ordinary loss amounted to¥2,135 million, and consolidated net loss stood at ¥1,416 million.

of securing orders with highest priority. As a result, the fine
As described above, we suffered a slight year-on-year decreasemechatronics segment recorded larger-than-planned sales of LCD

Net sales

Operating income

Sales by segment

Overseas sales by region(¥ Billions)(¥ Billions)(¥ Billions)(¥ Billions)

75.9

3.3
71.1

75.9

54.9

75.9

27.5

71.1

2.7

27.9

26.6
24.0

54.8

54.9 54.8
43.9

43.9
0.5

9.0

-1.5

1999 2000

2001

Years ended March 31

2002 2003-1.5

1999 2000 2001 2002 2003

1999 2000

Years ended March 31

Years ended March 31

2000 2001 2002 2003>>1999~2000
Electric power components
Automation equipment>>2000~2003
Fine mechatronics
Vending machine & systems

4

Financial Review

1999 2000

2001 2002 2003

Years ended March 31
Electronic equipment
Real estate leasing
Automation systems &vacuum equipment

Real estate leasing

Major countries or regions included in eachgeographical area;
Northeastern Asia - Korea,Taiwan
Other regions - U.S.A., Singapore

in sales and a net loss for the year ended March 31, 2003. However,As the automation systems & vacuum equipment segment, thewe began to gain far more orders than planned and to see sales

laser application equipment business fared well, supported by brisk

pick up in the latter half of the year. We also established production

equipment investment in overseas, especially in Asia, although it

systems for large glass substrates, and improve earnings

continued to suffer from restrained equipment investment due toperformance.

economic stagnation in Japan. With respect to the media device
manufacturing equipment business, DVD-related equipment
investment began in full-scale. However, sales of automation
systems fell sharply from the previous year’s level because theSegment Information

recovery of investment related to rechargeable battery equipment
was slow to come due partly to a prolonged, low level of general

The fine mechatronics segment recorded larger-than-planned sales

equipment investment in Japan and partly to slow sales of cellularof LCD manufacturing equipment, receiving orders at a steady pacephones and personal computers. As a result, the division recorded

thanks to sharp increase of Investment, especially in Korea, inconsolidated sales of ¥11,260 million for the year ended March 31,

manufacturing equipment ready for fifth-generation large glass

2003, a slight increase over the previous year, but suffered an

substrates (over 1 m square). On the other hand, the sharper-than-operating loss of ¥1,514 million, compared with an operating loss ofanticipated increase in investment pushed up development costs¥2,087 million for the previous year.

for equipment for new products. As a consequence, income fell far
below the planned level. However, the division’s equipment was

In the face of a severe business environment, including thebetter prepared for the next generation of substrates, and in thecontinued shrinkage of the cigarette vending machine market, thelatter half of the year the production system was more firmly

vending machines & systems segment succeeded in capturing aestablished and its earnings performance significantly improved.

larger market share through enhanced sales activities and in

The semiconductor manufacturing equipment business wascurtailing fixed costs. The division posted consolidated sales ofgenerally weak because of a low level of equipment investment by¥5,705 million, down 6 percent from the previous year, and an

the semiconductor industry. However, the pace of orders for back-

operating income of ¥238 million, compared with an operating loss

end process equipment began to recover, leading to a salesof ¥15 million for the previous year.

recovery. For the year ended March 31, 2003, the division recorded
consolidated sales of ¥35,651 million, a slight increase over the

The real estate leasing segment achieved planned targets,previous year, but suffered an operating loss of ¥650 million,

recording an operating income of ¥769 million on consolidated

compared with an operating income of ¥217 million for the previous

sales of ¥2,145 million, the same as the previous year’s figure.

year.

ROS

ROE

ROI

R&D expenses

(%)

(%)

(%)

(¥ Billions)

14.3

8.9

*Note1

2.7*Note1

4.1

2.3
2.1

2.0
1.4
-0.3

-0.8

-1.2

-0.7

1.4

1.4

-1.2
-2.2
-5.9

-3.4

1999 2000 2001 2002 2003
Years ended March 31

-4.4

-8.0

-5.0

-3.9

1999 2000

2001 2002 2003

Years ended March 31

1999 2000 2001 2002 2003
Years ended March 31

1999 2000 2001 2002 2003
Years ended March 31

Note 1: The dotted bar in 2001 indicates values excluding the increase in retirement benefit allowance.

Financial Review

5Research and Development Expenses

field, and toward development of an integrated system of sputtering
equipment for DVD-ROM/R and bonding equipment, high-speed

The Group has been actively conducting research andphase change sputtering equipment for CD-RW and DVD-RAM,development activities, ranging from element technologies tosputtering equipment for photocatalysts, high-speed business form

product development.

equipment, and rechargeable battery manufacturing equipment in
the automation systems and vacuum equipment field.

At present, research and development is conducted by theCompany’s Research & Development Division, development anddesign departments at our operations, and consolidated

Financial Condition

subsidiaries’ engineering departments. We have a comprehensive
R&D agreement with the Corporate Manufacturing Engineering
Center of Toshiba Corporation to promote efficient research,

As of March 31, 2003, total assets amounted to ¥63,615 million, adevelopment, and commercialization of cutting-edge technologies.

decrease of ¥4,032 million from the previous fiscal year-end.
Current assets declined ¥2,626 million from the end of the

The Group’s R&D expenses for the year ended March 31, 2003

previous fiscal year to ¥39,307 million. Among principal changes,

totaled ¥1,409 million. Major research results are described below.

notes and accounts receivable declined ¥1,220 million, owing to theeffects of a decline in sales. Inventory assets shrank 13 percent toIn the fine mechatronics segment, the Company worked on the¥15,180 million.

development of such LCD manufacturing equipment as wet
cleaning equipment for large substrates, cell assembly equipment,

Deferred tax assets rose ¥525 million to ¥950 million, due largely

and outer lead bonders for large displays and such semiconductor

to the net loss for the year ended March 31, 2003.

manufacturing equipment as chemical dry etching equipment,
ashing/etching equipment for low-k materials, semiconductor wet

On the liabilities side, total liabilities amounted to ¥46,549 million,cleaning equipment for 300 mm wafers, Cu-CMP slurry, high-speed,a decline of ¥2,583 million from the previous fiscal year-end. Total

high-precision flip chip bonders, and a multi-functional ACF line.

interest-bearing liabilities decreased ¥4,368 million from the end of
In the automation systems & vacuum equipment segment, thethe previous fiscal year to ¥16,891 million as a result of efforts toCompany worked toward development of laser marking equipment

reduce total assets. Notes and accounts payable increased ¥2,443

for semiconductor chips and LD (laser diode) pumped high-power

million from the previous fiscal year-end due to an increase in the

YAG laser processing equipment in the laser application equipment

backlog.

Capital expenditures

Free cash flows

D/E ratio(¥ Billions)(¥ Billions)

(%)

3.5

4.5

4.0

151.1
132.7
114.8
91.3

0.4

1.0

1.0

99.0

1.0
0.6

-3.0
-4.2

6

1999 2000 2001 2002 2003

1999 2000 2001 2002 2003

1999 2000

Years ended March 31

Years ended March 31

As of March 31

Financial Review

2001 2002 2003

In shareholders’ equity, retained earnings declined ¥1,417 million

inventory assets resulting from the management innovation

to ¥1,552 million due to the net loss for the year ended March 31,

movement “SM2003”, and an increase in account payable.

2003.
Net cash used in investing activities amounted to ¥469 million,
compared with ¥995 million in the previous fiscal year. This is due
largely to expenditures for the acquisition of tangible fixed assets.

Cash FlowsThe basic policy for equipment investment during the year ended
Cash and cash equivalents (hereinafter called “funds”) on a

March 31, 2003 was to make priority investment in facility capableconsolidated basis on March 31, 2003 stood at ¥3,343 million, anof contributing to profit generation through the creation of newincrease of ¥87 million from a year earlier, because a decrease due

products and the improvement of productivity. Under the policy,

to the loss before income taxes and a decrease in short-term bankequipment investment totaling ¥606 million was made, primarily inloans were more than offset by an increase resulting fromthe fine mechatronics segment. Corporate infrastructure investment

decreased trade receivable and inventory assets, an increase inincluded innovations of information technology and systems, andaccounts payable, and others.

environmental investment. In addition, production facilities wereexpanded to boost the production of LCD manufacturing

Net cash provided by operating activities in the year ended

equipment, which is becoming increasingly large.

March 31, 2003 amounted to ¥4,932 million, compared with ¥3,177
million in net cash used in operating activities the previous fiscal

Net cash decreased in financing activities amounted to ¥4,373

year. The increase is largely attributable to the loss before income

million, compared with an increase of ¥3,120 million in the previous

taxes, an increase in the depreciation, a decrease in tradeyear. This was due primarily to a decrease in short-term bank loans.

receivable as a result of promotion of early recovery, a decrease in

Five-Year Summary
Thousands of
U.S. dollars

Millions of yen
2003
Consolidated

2002

2001

2000

1999

2003

Years ended March 31¥ 54,761¥ 54,917¥ 71,117¥ 75,935¥ 43,875$ 455,589

Cost of sales

45,42844,51955,17559,85333,868377,940

Operating income (loss)(1,502)(1,536)

3,262

2,735

501

(12,500)

Income (loss) before income taxes(2,172)(1,810)(1,197)(968)

45(18,071)

Net income (loss)(1,416)(1,118)

(141)

(215)

(111)

(11,781)

Depreciation and amortization

2,080

2,144

2,065

3,302

2,502

17,310R&D expenses

1,409

2,313

2,685

2,115

1,443

11,719¥ (28.40)¥ (22.46)

Total assets

63,61567,64775,394

83,09060,770529,244

Total shareholders’ equity

17,066

18,514

19,704

19,684

16,127

141,978

Number of employees

1,586

1,719

1,756

2,446

1,629

1,586

Net sales

Net income (loss) per share¥(2.83)¥(4.65)¥(2.80)$(0.24)

Five-Year Summary

7

Topics 2002 in Shibaura
A Bid to Upsize Mother Glass Substrate <LCD Manufacturing Equipment>
Following notebook computers and monitors, flat panel televisions

Also with respect to manufacturing equipment for the fifth-

are emerging as a big market for LCDs. It is expected thatgeneration (over 1 m square) substrates, the Company has

increasing investment will be made in equipment that is ready fordelivered many units, being ahead of competitors. Moreover thelarger glass substrates in anticipation of LCD televisions.

Company launched the equipment for the sixth-generation large
glass substrates.

In pursuit of higher productivity, LCD manufacturers areendeavoring to upsize mother glass substrates because more LCDs

With respect to manufacturing equipment for the seventh-can be yielded from each of them. The primary targets of current

generation large glass substrates, Shibaura Mechatronics isequipment investment are fifth-generation substrates, that is,preparing to provide equipment based on new concepts.

substrates 1 square meter or over. In the future, however, moreinvestment will be made in equipment compatible with the sixth-

As regards the cell assembly process, Shibaura Mechatronics

generation substrates, that is, much larger substrates. There

has started providing a new integrated cell assembly system that

already are equipment investment plans for the seventh-generation

utilizes liquid crystal dropping and a vacuum alignment system. The

substrates.

new system makes it possible to significantly improve material
utilization and productivity, thus helping LCD manufacturers

Shibaura Mechatronics provides major LCD manufacturers withimprove productivity and cut product costs.

LCD manufacturing equipment covering processes from front-end(TFT process and color filter process) to back-end (module

Concerning the back-end module process, the Company
maintains a large share of the market for outer lead bonders used

process).

for bonding driver ICs to panels. In fiscal 2002 we launched 40-inch
With respect to manufacturing equipment for the fourth-class equipment to respond to increasingly large LCD televisions. In

generation (less than 1 m square) substrates, Shibaura

the future, we will develop a series of outer lead bonders for LCD

Mechatronics delivered many units, including wet process

televisions and will endeavor to promote sales, taking advantage ofequipment such as wet cleaning equipment, to many LCD

the substantial popularization of LCD televisions.

manufacturers, thus firmly establishing its position in the market.

Mother glass substrate for LCD has exceeded
1m square and getting larger and larger.
Shibaura Mechatronics launched the Advanced Wet Processor for Gen.6
adopted 3-dimensional panel transfer system to achieve a small footprint.
Moreover, we are prepareing the New Concept Processor for Gen.7
with 3-dimensional process, resulting in great deal of energy savingand small footprint.

From upstream process

To downstream process

Gen. 7 (1800 X 2100mm)

3-Dimensional Panel Transfer System

Gen. 6 (1500 X 1800mm)

Gen. 5 (1000 X 1200mm)

Gen. 4 (680 X 880mm)
Advanced Wet Processor for Gen.6

8

Topics 2002 in Shibaura

Aiming to Be No.1 in the World <DVD Manufacturing Equipment>
Following the lead of DVD players, DVD recorders are really coming

The last stage of the DVD manufacturing process is the process

into widespread use. Just as CDs and MDs have replacedof bonding two 0.6 mm-thick discs together. Our bonding

phonograph records and tapes, DVDs have started replacing

equipment does its job in vacuum to prevent the generation of air

videotapes. It is considered certain that total domestic demand forbubbles in the bonded part and thus to enable the production ofrecordable DVDs, write-once type and rewritable type, will exceed

discs of more stable quality. Our bonding equipment is highly rated

that for videotapes by 2004. DVDs will gradually replace videotapes

by users.

on a global scale.
Shibaura Mechatronics is working on the development of
The main products that Shibaura Mechatronics provides for the

manufacturing equipment for next-generation large-capacity discs

DVD manufacturing process are sputtering equipment and bonding

to succeed DVDs. The Company has already delivered

equipment. The Company’s sputtering equipment, in particular, is

experimental equipment and small-scale production equipment forbased on vacuum technology the Company has developed over

the AOD (Advanced Optical Disc) and the BD (Blu-ray Disc), bothmany years and is highly trusted by users. It enjoys the largestof which are still in the experimental stage. In our equipment

share of Japanese market.

development activities, we are holding partnership with customers
who are expected to start investing in mass-production equipment

As DVDs are really coming into wide use, DVD-related equipment

several years from now.

investment is rapidly increasing on a global scale. In fiscal 2002, weshipped many units to overseas markets, including the UnitedStates and Taiwan. There has been a particularly sharp increase inequipment investment for recordable DVDs, which are expected toreplace videotapes. Our sputtering equipment “OCTAVA-Series” ishighly rated for its high productivity and disc quality. We havesucceeded in selling it in some countries where we previously had
no sales record. In the future, we will step up global sales promotionof DVD-related equipment.

DVD Recorder

The DVD (Digital Versatile Disc)is about to make quantum leaps.
Our "Octava-II" is the world's fastest
sputtering equipment for DVDs, andincorporates our high-speed sputtering
technology and high-precision disctransferring technology.

DVD Player

Personal Computer

Game Machine

World's Fastest Sputtering Equipment for DVD's, Octava-II
Car Navigation System

Topics 2002 in Shibaura

9Aiming for the Expanding Asian Market
With about half of our sales being recorded abroad, it is becoming

delivery to customers. Under this system we will endeavor to meeteven more important for us to enhance our activities overseas. Foran even wider variety of customer needs.

this reason, we have been making efforts to better position
ourselves to do business in the global market. Shibaura

Taiwan is the most important area for us, accounting for the

Mechatronics set up a affiliated company in the United States inlargest part of our overseas sales in a single region, and will also be

1996, and subsequently did the same in Taiwan, Korea, and China.

so in fiscal 2005, the last year of our new medium-term
management plan. For us, Taiwan has primarily been a market for

For cultivation of the rapidly expanding Chinese market, we will

LCD manufacturing equipment, but it will now become important foract primarily through SHIBAURA MECHATRONICS (SHANGHAI)

equipment of all the segments we produce. To reinforce our sellingCO., LTD., which we set up jointly with Mitsui & Co., Ltd. in Octoberpower, we will beef up the organization of our affiliated company

2001. We will quickly establish a three-point network linking

there and strengthen its linkage with the parent company’s

Shanghai, North China, and South China, and will strive to achieve

operating divisions.

¥6 billion in annual sales to China by fiscal 2005.
As part of its efforts to accelerate overseas businessIn the year ended March 31, 2003, we recorded a 2.4-fold sales

development on corporate level, Shibaura Mechatronics set up theto Korea over the previous fiscal year, due especially to the delivery

International Operations Division in April 2003. The division isof LCD manufacturing equipment for large glass substrates. Major

responsible for better positioning ourselves for overseas business

Korean LCD manufacturers have been actively making equipmentby firming up links between Shibaura Mechatronics’ headquarters ininvestment. In an effort to boost sales to that country, we recently

Japan and its operating bases abroad, and thus promoting global

constructed a new factory for our joint venture company in Korea.

business management.

Completed in the end of April 2003, the factory will gradually
expand production, starting with peripheral equipment for LCD
manufacturing. We adopted a production system under which we
supply core equipment from Japan, and equipment and peripheral
units are integrated in the Korean factory as final products for

Expansion of the Asian market is very steep.
Cooperating with our overseas affiliated companies,
Shibaura Mechatronics is promoting businessexpansion in Asian area, especially in Taiwan, Korea
and China.

SHIBAURA MECHATRONICS CORPORATIONOur new factory in Korea started operationin this April.

SCK CO., LTD.

U.S.A.
2%
Other
4%

China
4%
Korea
13%

SHIBAURA MECHATRONICS (SHANGHAI) CO., LTD.

China
2%
Korea
5%

U.S.A.
2%

Taiwan
25%

Japan
52%

Other
10%
Taiwan
24%

Japan
56%

2003. 3

Sales by Region
SHIBAURA MECHATRONICS TAIWAN CORPORATION

10Topics 2002 in Shibaura

2002. 3

Environmental Activities 2002 in Shibaura
Basic Environmental Concepts
It is one of our most important management tasks to establish, in consideration of the Earth’s environment, the recycling society in which
limited resources are effectively used. Shibaura Mechatronics thinks that addressing environmental issues is a primary management
requirement and emphasizes “E-Shibaura” in its Basic Policy for Environmental Protection, which represents the fundamental principles of ourcorporate environmental management. Shibaura Mechatronics is working with three basic environmental concepts: “Improving theEnvironment Awareness”, “Environment-Aware Manufacturing” and “Environment-Friendly Designed Products”.

Basic Policy for Environmental Protection
As “The Provider of Infrastructure for The Digital Age”, Shibaura Mechatronics aims to contribute to society by being conscious of theenvironment in conducting production activities and by providing environment-friendly designed products worldwide. It is one of our mostimportant management tasks to make efforts to protect the environment. We are working with the recognition that the earth is an irreplaceable
asset, and that it is mankind’s duty to hand it on to future generations.

The Voluntary Environmental Plan
Prevention of global warming:
Reduce to 28% in fiscal 2010 compared with fiscal 1990 in the ratio of CO2 release to net sales
Zero emission of waste:
Starting in fiscal 2000, achieve zero emissions of waste by fiscal 2005 (The quantity of final
disposal to be 1% or less of total discharge)
Reduce release of chemical substances:
Reduce to 30% in fiscal 2005 compared with fiscal 2000
Voluntary restrictions on noise, vibration, water and air pollution:
Comply with self-imposed restrictions based on legal restrictions
Disclosure and contribution to society:Expand environmental information disclosure and make environmental contributions to local
communities
Green procurement:
Set target for fiscal 2005 with fiscal 2000 as a benchmark
Create environmentally designed products:
Create environmentally designed products, assessed by weight reduction and energy savings
Based on fiscal 2000 standards, by fiscal 2005:• Achieve 30% reductions in weight and electricity consumption per production function• Ensure that greater than 50% of total products are environmentally designed

Environmental Activities in 2002
To ensure that not only top management but also each employee is environmentally aware andacts in accordance with that awareness, we formulated the Guidelines for Environmental Activities
and distributed them to employees.
To have our environmental preservation activities understood, we issued an environmental report
describing the results of our environmental activities during the year.

Zero Waste-Emission

Prevention of Global Warming

Yokohama Operations and Sagamino Operations achieved
zero emission of waste.

We reduced CO 2 emissions by taking such steps asconserving electric power and converting to city gas, whichplaces less impact on the environment.

Waste volume and growth of the recycling rate

The ratio of CO2 emissions production(t-CO2/100 millions of yen)

(t)

75.3

83.6

Total output

Recycling

93.3

97.3 (%)

1055.81095.3

75.7

30.9

75.0

73.8

72.6

71.5

70.3

53.6

48.0

51.3

53.8

56.6

1999
2000
Years ended March 31

2001

2002

2003

54.1

643.5

546.1

790.5

292.2

1044.3

205.1

Waste

Transition of CO2 emissions(t-CO2)

1999

2000

Recycling(t)Years ended March 31

2001
Waste(t)

2002

2003

7326.65600.96398.75436.65298.4

1999

2000

2001

2002

2003

Recycling rate(%)
Years ended March 31

Environmental Activities 2002 in Shibaura

11Board of Directors
As of June 12, 2003

Standing, from left;
Noriaki Mori, Tsunemasa Tokura, Hiroshi Horioka, Kunihiko Yokoyama, Mikio Haga, Nobuyuki Yamaura, Masakazu Mori, Michio Tsuruoka, Yasuaki Nakazawa
Sitting, from left;
Yasutomo Fujimori, Michirou Ishii, Toshio Yokouchi, Hiroo Okuhara, Toshimichi Sanada, Choichi Kimura, Shunichi Kato, Noboru Tamura

President and Chief Executive Officer
Hiroo Okuhara

Vice President
Yasutomo Fujimori General Manager of Laser Systems

Executive Vice President
Toshimichi Sanada Assistant to President

Division
Noboru Tamura General Manager of Bonding Equipment

Chief Sales and Marketing Officer

Division

General Manager of Sales Planning

Mikio Haga (Finance & Accounting Division)

Division(Management Accounting Division)(Seibu Branch Office)General Manager of Management Audit

Toshio Yokouchi Assistant to President
Chief Information Officer

Division
Nobuyuki Yamaura General Manager of Automation Systems

Chief Risk Management Officer
General Manager of Corporate Planning& Vacuum Equipment Division
Kunihiko Yokoyama President of SHIBAURA MECHATRONICS

Division
Senior Vice President(SHANGHAI) CO., LTD
Masakazu Mori General Manager of International

Choichi Kimura Executive Manager of LCD GroupOperations Division

General Manager of Fine Mechatronics

General Manager of Export Control

Division
Vice President

Division
Hiroshi Horioka General Manager of General Affairs

Michirou Ishii Executive Manager of Semiconductor
Manufacturing Equipment Group
General Manager of Semiconductor

Michio Tsuruoka

Manufacturing Equipment Division

Tsunemasa Tokura

Shunichi Kato Chief Manufacturing Officer
Chief Technical Officer
Chief Procurement Officer
Chief SM-2003 Planning Officer
Chief Environmental Protection Officer
General Manager of Environment &Production Planning Division

12

Board of Directors

Division
Auditor

Auditor (Outside)
Yasuaki Nakazawa
Noriaki MoriCorporate Data
As of March 31, 2003

Date Established

Common Stock Price Range (The Tokyo Stock Exchange)

October 1939

Years ended March 31

2003

2002

2001

2000

1999

High (yen)

604

710

1,330

1,885

790

Low (yen)

201

253

445

511

255

Paid - in Capital
5,868 Million -Yen

Common Stock
Issued and outstanding : 50,033,312 shares

Number of Employees
960

Principal Shareholders
Number of shares held
(thousand shares)

Percentage of total
shares outstanding (%)

23,477

46.9

The Master Trust Bank ofJapan, Ltd.

729

1.5

MITSUI & CO., LTD.

715

1.4

Mitsui Asset Trust and Banking
Company, Limited

526

1.1

Shareholders
8,428
Toshiba Corporation

Stock Listings
The Tokyo Stock Exchange

Accounting Auditor
Shin Nihon & Co.

Printed on Recycled Paper
SEB-0003A 1T 0307
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